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City Hall 
Dr. Carlton B. Goodlett Place, Room 244 
BOARD of SUPERVISORS J]^ )*) San Francisco 94102^1689 

Tel. No. 554-5184 
Fax No. 554-5163 
\^ ?%£!/ TDD/TTY No. 544-5227 

3<?0. 35^ 

» j NOTICE OF CANCELLED MEETINGS 

,Jz 7 / 00 FINANCE AND LABOR COMMITTEE 

*-W^ £AN FRANCISCO £OARD OF SUPERVISORS 

1/3/c, 









NOTICE IS HEREBY GIVEN that the meetings of the Finance and Labor Committee 
scheduled for Wednesday, December 27, 2000, and Wednesday, January 3, 2001, at 
10:00 a.m., at 1 Dr. Carlton B. Goodlett Place, Room 263, City Hall, San Francisco, 
California, have been cancelled. 



Gloria L. Young, Clerk of the Board 



DOCUMENTS DEPT. 

DEC 2 2000 

SAN FRANCISCO 
PUBLIC LIBRARY 



POSTED: DECEMBER 19. 2000 






Cancelled Meeting Nobce/Ad 1/21/00 



3 1223 06446 9811 




City Hall 

\'£\ Dr. Carlton B. Goodlett Place. Room 244 

San Francisco 94102-4689 

Tel. No. 554-5184 

Fax No. 554-5163 

tX \/Ts^^^v/ TDD/TTY No. 544-5227 

•/ 

NOTICE OF CANCELLED MEETING 
1//0/0I 

t**c*/J PINANCE AND LABOR COMMITTEE 

£AN FRANCISCO BOARD OF SUPERVISORS 



NOTICE IS HEREBY GIVEN that the meeting of the Finance and Labor Committee 
scheduled for Wednesday, January 10, 2001, at 10:00 a.m. at 1 Dr. Carlton B. Goodlett 
Place, Room 263, City Hall, San Francisco, California, has been cancelled. 



Gloria L. Young, Clerk of the Board 



°°CUMENTS OEPT 
JAN - 8 2001 

ueu c libr arv 



Cancelled Meeting Notice Ad 



I IN VNCE AND LABOR COMMITTEE 
S.F. BOARD OF SUPERVISORS 
CITY HALL. ROOM 244 
I DR CARLTON GOODLETT PLACE 
SAN FRANCISCO. CA 94102-4 

IMPORTANT HEARING NOTICE!!! 



41 l.ibran 

100 l.arkin Street Govt Information < enter 



ZisTqp 



City and County of San Francisco 

Meeting Minutes 

Finance and Labor Committee 

Members: Supervisors Leland Yee, Tom Ammiano and Mark Leno 



Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, January 17, 2001 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Leland Y. Yee, Tom Ammiano, Mark Leno. 



MEETING CONVENED 

The meeting convened at 10:08 a.m. Board President Ammiano appointed Supervisor Leno to serve on the 
Finance and Labor Committee for today's meeting. 

002191 [Contract for Electric Service, Treasure Island and Yerba Buena Island] 

Resolution approving the contract between the City and County of San Francisco and the United States, 
through the Department of Energy Western Area Power Administration, for the delivery of low cost electric 
power for use at Treasure Island on file with the Clerk of the Board of Supervisors File No. 002 191; and 
approving indemnifying and holding harmless the United States against claims arising from the activities of the 
City under the contract; and waiving requirement of Section 21.35 of the San Francisco Administrative Code 
that every contract contain a statement regarding liability of claimants for submitting false claims; and waiving 
requirement of Section 21.19 of the San Francisco Administrative Code that every contract contain a statement 
regarding guaranteed maximum costs. (Public Utilities Commission) 

(Fiscal impact.) 

12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Maria Jurosek, Director of Retail Ser\>ices, 
Public Utilities Commission; Richard Robinson, McMillan Drop-In Center. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



City and County of San Francisco 



Printed at S." // I'M <•» i 3 HJ 



Finance and Labor Committee Meeting Minutes January 17, 2001 



001796 |Creating a Special Assistant XVI position at the Board of Appeals, while Director is on medical leave| 

Ordinance appropriating 5105,065 from the General Fund Reserve to fund the salary and fringe benefits of a 
Special Assistant XVI at the Board of Appeals, while Director is on medical leave and operating expenses, and 
amending Annual Salary Ordinance for fiscal year 2000-01. (Controller) 

(Companion measure to File 001797.) 

1 1/22/00, RECEIVED AND ASSIGNED to Finance and Labor Committee 
1 2/1 3/00, SUBSTITUTED. Substituted by Controller 1 2/1 3/00, bearing new title. 
12/13/00, ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Linda Avery, Acting Executive Secretary, 
Board of Appeals. Amended as follows : On page I, lines 2, 14 and 25, by replacing "$105,065" with 
"$73,364"; on line 6, by adding "placing $36,682 on reserve"; on line 18, by replacing "$52,184" with 
"$49,972"; on line 20, by replacing "$20,919" with "$9,415"; on line 22. by replacing "$14,302" with 
"$1 1,494"; on line 23, by replacing "$7,660" with "$2,483 " Further amended on page 2 by adding the 
following: "Section 3. Funds in the amount of $36,682 are hereby placed on reserve for three months, to be 
released by the Finance and Labor Committee. " New title. 
AMENDED. 

Ordinance appropriating $73,364 from the General Fund Reserve to fund the salary and fringe benefits of a 
Special Assistant XVI at the Board of Appeals, while Director is on medical leave and operating expenses, and 
amending Annual Salary Ordinance for fiscal year 2000-01; placing $36,682 on reserve. (Controller) 

(Companion measure to File 001797.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Yee, Ammiano, Leno 



001797 [Public Employment, Board of Appeals| 

Ordinance amending Ordinance No. 181-00 (Annual Salary Ordinance, 2000'01 ) reflecting the creation of one 
position at the Board of Appeals. (Human Resources Department) 

(Companion measure to File 001796.) 

1 1/22/00, RECEIVED AND ASSIGNED to Finance and Labor Committee 

12/13/00, SUBSTITUTED. Substituted by Human Resources Department 12/13/00. bearing same title. 

12/13/00, ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose. Budget Analyst; Linda Avery. Acting Executive Secretary. 
Board of Appeals. 

RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



O'.v and County of San Francisco 2 Primed at 5: 1 1 PM on J J M 



Finance and Labor Committee 



Meeting Minutes 



January 17, 2001 



002087 [Fund litigation and mediation expenses for VIACOM, AT&T, and TCI appeals for the Assessor's 
Office] 

Ordinance appropriating $1,245,909 of the General Reserve-Litigation to fund the litigation and mediation 
expenses associated with the VIACOM, AT&T, and TCI appeals and development and implementation of 
reengineering plan for the Assessor's Office for fiscal year 2000-01. (Controller) 

(Fiscal impact.) 

1 1/20/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

12/1/00, SUBSTITUTED. From Controller, Funding Sources on page 1 , line 13 should have reflected "G" for grant funded; same title. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Doris Ward, Assessor; Edward Harrington, 

Controller. Amended on page 2, lines 7 and 15, by replacing "$223,887" with "$176,297." After further 

consideration, the legislation was divided into two separate pieces. See File 010108. 

AMENDED. 

DIVIDED. 

Ordinance appropriating $471,593 of the General Reserve to fund the litigation and mediation expenses 

associated with the VIACOM, AT&T, and TCI appeals for the Assessor's Office for fiscal year 2000-01. 

(Controller) 

(Fiscal impact.) 

RECOMMENDED AS DIVIDED by the following vote: 

Ayes: 3 - Yee, Ammiano, Leno 



010108 [Fund the development and implementation of Reengineering Plan for the Assessor's Office Efficiency 
Program] 

Ordinance appropriating $726,726 of the General Reserve to fund the implementation of Reengineering Plan. 
for the Assessor's Office for fiscal year 2000-01. (Assessor-Recorder) 

(Supervisor Leno dissenting in Committee.) 

Divided from File 002087. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 3 - Yee, Ammiano, Leno 



City and County of San Francisco 



Printed at >:U PH on I ' II J 



Finance and Labor Committee Meeting Minutes January I 7, 2001 



002184 |Funding for operating costs and implementation of a State required Customer Service Unit| 

Ordinance appropriating $839,562 to support both continuing operating costs and the implementation of a State 
required Customer Service Unit ($594,262 for Child Support Service Division and $245,300 for CSS Cases 
Consortium) and the creation of two positions at the Department of Child Support for fiscal year 2000-01 . 
(Controller) 

(Fiscal impact; Companion measure to File 002183.) 
12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Milton Hyams. Acting Director, Department of 
Child Support Services. Amended on page 1 asfollows: On line 2, by replacing "$839,562" with "780.837"; 
on line 3, by replacing "$594,262" with "$535,537"; on line 5. by adding "ratifying action previously taken ", 
on line 15, by replacing "$392,214" with "$353,455"; on line 18. by replacing "$202,048" with "$182,082"; 
on line 22, by replacing "$85,416" with "$53,385"; on line 24. by replacing "$21,354" with "$13,346". 
Amended on page 2 asfollows: On line 16, by replacing "$144,945" with "$126,259"; and on line 18. by- 
replacing "$839,562" with "780,837". Amended on page 3 by adding the following: "Section 3. The 
Department of Child Support Sen'ices shall eliminate the two 8204 Institutional Police Officer positions as 
soon as each position becomes vacant. " Further amended on page 3 by adding Section 4 to provide for 
ratification of action previously taken. New title 
AMENDED. 

Ordinance appropriating $780,837 to support both continuing operating costs and the implementation of a State 
required Customer Service Unit ($535,537 for Child Support Service Division and $245,300 for CSS Cases 
Consortium) and the creation of two positions at the Department of Child Support for fiscal year 2000-01; 
ratifying action previously taken. (Controller) 

(Fiscal impact; Companion measure to File 002183.) 
RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Yee, Ammiano, Leno 



002183 [Creating two (2) positions in Child Support Scrviccs| 

Ordinance amending Ordinance No. 181-00 (Annual Salary Ordinance, 2000/01 ) reflecting the creation of two 
positions in Child Support Services. (Human Resources Department) 

(Fiscal impact; Companion measure to File 002184.) 
12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose. Budget Analyst: Milton Hyams. Acting Director. Department of 
Child Support Sen'ices. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



City and County- of San Francisco 4 Printed at 5:12 P\1 



Finance and Labor Committee 



Meeting Minutes 



January 17, 2001 



001251 [Reserved Funds, Department of Public Health] 

Hearing to consider release of reserved funds, Department of Public Health (Fiscal Year 2000-2001 Budget), 
in the amount of $1,233,854, to fund the San Francisco General Hospital-Department of Psychiatry Acute 
Inpatient Service. (Public Health Department) 
12/6/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Ken Bruce, Budget Analyst's Office; Monique 
Zmuda, Chief Financial Officer, Department of Public Health. Release of reserved funds in the amount of 
$1,233,854 approved. 

APPROVED AND FILED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



002187 [Contract between the Dept. of Public Health and Health Advocates, LLP to provide uncompensated 
care recovery services] 

Resolution authorizing the Director of Public Health and the Purchaser to execute a contract between the City 

and County of San Francisco and Health Advocates, LLP to provide uncompensated care recovery services. 

(Public Health Department) 

12/13/00, RECEIVED AND ASSIGNED to Public Health and Environment Committee. 

12/28/00, TRANSFERRED to Finance and Labor Committee. At the request of the President, this matter is to be scheduled for the 

January 10, 2001 meeting. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer, 
Department of Public Health; Steve Reid, President, Paralign; Diane Sovereign (attorney); Linda Safir, 
Director of Sales, Paralign; Karla Fine, Manager, Paralign; Fanny Mayorga, Paralign; Juan Sosa, Paralign; 
Helen Lim, Paralign; Robert McCarthy (registered to speak for Paralign); Al Leibovic, Health Advocates; 
Theodore Lakey, Deputy City Attorney; Edward Harrington, Controller. 
Continued to January 31, 2001. 
CONTINUED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



002185 [Lease of property for DPH-Health Promotion and Prevention Unit currently located at 101 Grove 
Street, to alleviate overcrowding] 

Resolution authorizing the lease of 1 1,125 square feet at 30 Van Ness Avenue for the Department of Public 
Health. (Public Health Department) 

(Fiscal impact.) 

12/13/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property. Real 
Estate Department. 

RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



City and County of San Francisco 



Printed at 5:12 PM on I MM 



Finance and Labor Committee Meeting Minutes January I ", 2001 



002145 [S. F. International Airport Advertising Program Lease| 

Resolution approving San Francisco International Airport Advertising Program Lease between Transportation 
Media, Inc. (a division of Eller Media) and the City and County of San Francisco, acting by and through its 
Airport Commission. (Airport Commission) 
1 2/6/00, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers; Harvey Rose, Budget Analyst; Cathy Widener, Governmental Affairs 
Administrator, Airport. 
Continued to January 31, 2001. 
CONTINUED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



001252 |Rescrved Funds, Port of San Francisco] 

Hearing to consider release of reserved funds, Port of San Francisco (San Francisco Harbor Operating Funds, 
File 101-96-19, Ordinance No. 470-96), in the amount of $460,000 for Piers 48 and 50 Fire Protection project. 
(Port) 

12/5/00, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Imani Haygood, Port Release of reserved 
funds in the amount of $460,000 approved 
APPROVED AND FILED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Ammiano 



002163 [Contracting out City services] 
Mayor 

Resolution concurring with the Controller's certification that assistance to certain victims of crime and 

education in community anti-street violence can be practically performed for the District Attorney's Victim 

Witness Assistance Program by a private contract for a lower cost than similar work services performed by 

City and County employees. 

12/1 1/00, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speaker: Harvey Rose. Budget Analyst Amended on page 1, line 2, after "concurring. " 

and on page 2. line 4, after "concurs, " by adding "retroactively " 

AMENDED. 

Resolution concurring, retroactively, with the Controller's certification that assistance to certain victims of 

crime and education in community anti-street violence can be practically performed for the District Attorney's 

Victim Witness Assistance Program by a private contract for a lower cost than similar work services performed 

by City and County employees. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 2 - Yee, Leno 

Absent: 1 - Ammiano 



City and County of San Francisco 6 Printed at 5:1? PW or } 3 i •'- 



Finance and Labor Committee 



Meeting Minutes 



January 1 7, 2001 



002186 [Option to extend lease at One Market Plaza (Steuart Tower, Second Floor) for Dept. of 
Telecommunications and Information Services] 

Resolution authorizing the exercise of option regarding an extension of a real property lease at One Market 
Plaza, on behalf of the Department of Telecommunications and Information Services. (Real Estate Department) 

(Fiscal impact.) 

1 2/1 3/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. Sponsor requests that this item be scheduled for the January 

10, 2001, meeting. Item needs to be considered as soon as possible. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real 
Estate Department. 

RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



002217 [Reserved Funds, Police Department] 

Hearing to consider release of reserved funds, Police Department (Fiscal Year 2000-01 Budget), in the amount 
of $4,297,098 to defray overtime costs. (Police Department) 
12/20/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Captain John Goldberg, Police Department, 
Fiscal Division. Release of reserved funds in the amount of $4,297,098 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



ADJOURNMENT 

The meeting adjourned at 12:29 p.m. 



City and County of San Francisco 



I'rinlc.Ul hll I'M M I I 04 



3 
\ln/o\ 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



CITY AND COUNTY 




OF SAN FRANCISCO 



DOCUMENTS DEPT 
^OARD OF SUPERVISORS 

JAN t 1 2001 

BUDGET ANALYST 
1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-76§j? N FR ANClSCO 
FAX (415) 252-0461 DBL,C L 'BRARY 

r 

January 11, 2001 

TO: 'Finance and Labor Committee 

FROM: Budget Analyst 

SUBJECT: January 17, 2001 Finance and Labor Committee Meeting 



Item 1 - File 00-2191 

Department: 

Item: 



Electric Service 
Provider: 



Public Utilities Commission (PUC) 

Resolution approving tbe contract between tbe City and 
County of San Francisco and the United States, through 
the Department of Energy Western Area Power 
Administration, for the delivery of low cost electrical 
power for use at Treasure Island; and approving, 
indemnifying, and holding harmless the United States 
against claims arising from the activities of the City 
under the contract; and waiving the requirement of 
Section 21.35 of the San Francisco Administrative Code 
that every contract contain a statement regarding liability 
of claimants for submitting false claims; and waiving the 
requirement of Section 21.19 of the San Francisco 
Administrative Code that every contract contain a 
statement regarding guaranteed minimum costs. 



Administrator, Western Area Power Administration, 
United States Department of Energy (WAP A) 



Memo to the Finance aiid Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Term of Contract: 



January 1, 2005 to December 31, 2024 (20 year term). 
According to Ms. Maria Jurosek of the PUC, this contract 
is being prepared four years in advance of its 
commencement date in order to comply with WAPA's 
contracting timeline to secure the continuation of WAPA 
electric service provision for twenty years after January 1, 
2005. Ms. Jurosek states that, by law, Federal preference 
hydropower (including the electrical power generated by 
WAPA) must be sold at cost and only for authorized uses. 
The development of Treasure Island 1 is such an 
authorized use. 



Cost Payable by the 

City to the United 

States Department of 

Energy: Up to a maximum of $20,000,000, at an average of 

$1,204,500 per year over the 20 year term of the proposed 

contract (see Comment No. 3). 



Source of Funds: 



Description: 



Proceeds of the sale of electrical power to Treasure Island 
tenants. These proceeds are held by the Treasure Island 
Development Authority. According to Ms. Eila Arbuckle 
of the Treasure Island Development Authority, the 
Treasure Island Development Authority is self-supporting 
through facility rentals. 

The City is currently providing operations and 
maintenance services at Treasure Island, initially under a 
multi-year Cooperative Agreement with the U.S. Navy. 
The Cooperative Agreement with the Navy was approved 
by the Board of Supervisors in August of 1997 (File 244- 
97-4). Ms. Arbuckle states that the bulk of Navy financial 
support expired on September 30, 2000, with ongoing 
minimal funding of $145,000 for caretaking services 
provided until September 30, 2001. Ms. Arbuckle further 
states that the Treasure Island Development Authority 
has issued a Request for Qualifications for a primary 
developer for Treasure Island and a selection is due to be 
made by June 30, 2001, at which time the City expects to 
acquire the title to former Treasure Island Naval Station 



1 All references to Treasure Island in the proposed contract and this report also refer to the 
adjoining Yerba Buena Island. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



and transfer management responsibility to the selected 
"developer. Una ef the Federal Base Closure and 
Realignment Act, the City is the local reuse authority for 
the Treasure Island Naval Station. As the local reuse 
authority, the City has acted as the entity focused on the 
planning, redevelopment, reconstruction, rehabilitation, 
reuse, and conversion of the Treasure Island Naval 
Station for the public interest, convenience, welfare, and 
common interest of the citizens of San Francisco. Since 
October 1, 1997, the PUC has been providing electrical 
power to Treasure Island, initially purchasing WAPA 
electrical power through the Navy, and then purchasing 
WAPA electrical power directly under the PUC's existing 
contract with WAPA, as explained below. 

Under the Federal Base Closure and Realignment Act, 
the United States Department of Energy makes low-cost 
Federal electrical power available to support economic 
development for the conversion of military bases. 
Between October 1, 1997 and September 29, 1998, the 
Navy purchased such Federal electrical power from 
WAPA on behalf of the PUC in order to supply electrical 
power to Treasure Island. On October 7, 1998, the Board 
of Supervisors approved a contract between the City and 
the United States Department of Energy which enabled 
the PUC to purchase such power directly from WAPA in 
order that the City could continue to receive the benefits 
of the low cost Federal electrical power without having to 
purchase it through the Navy (File 98-1776). This 
contract came into effect on October 1, 1998 and is due to 
expire on December 31, 2004. 

Approval of the subject resolution would enable the City 
to continue purchasing low cost Federal National Defense 
Authorization Act electrical power for Treasure Island for 
an additional 20 years. 



Comments: Cost 



1. WAPA would provide electrical power to the City on a 
"take-or-pay basis." Under this arrangement, the City 
would be obligated to pay for its percentage share of the 
costs related to WAPA's generation of electrical power, 
whether or not the City uses its full allocation of electrical 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



power. According to Ms. Jurosek and Mr. Jo e Como of the 
"City Attorney s~Offi.ce, the City's allocation is 0.17264 
percent of WAPA's total electrical power generation, 
based on (a) the percentage of WAPA resources provided 
to the Navy at the Treasure Island Naval Station prior to 
its closure, and (b) a small additional percentage of power 
which WAPA has determined that each of its customers 
could use in the future 2 . The City would pay for that 
allocation of electrical power in accordance with a 
schedule of rates determined by the United States 
Department of Energy 5 . The subject contract provides for 
an exchange program whereby the City could make any 
unusable portion of its WAPA electrical power allocation 
available to other WAPA customers. The City would be 
reimbursed at a "pool energy rate" determined by the 
United States Department of Energy. Any electrical 
power not consumed by WAPA customers could be 
provided by WAPA to the open market. Revenues 
collected by WAPA from the open market would be 
credited to the customers up to the "pool energy rate", and 
any revenues in excess of that rate would be retained by 
WAPA 4 . 

2. According to Ms. Jurosek, the peak electric demand on 
Treasure Island is currently 3 megawatts of electrical 
power and growing. Under the proposed contract, the 
initial WAPA allocation is between 3 and 5 megawatts of 
electrical power. The peak demand for electrical power 
upon completion of development on Treasure Island is 
unknown, but depending on the development concepts 



2 The subject contract provides for the City's percentage to be adjusted on January 1, 2015, as part 
of the United States Department of Energy's establishment of a 2015 Resource Pool for new power 
allocations. Any reallocations would be based on WAPA customers' actual electrical power usage in 
2015. Ms. Jurosek states that this action in 2015 would represent a mid-term reallocation of 
resources based on actual usage. 

3 The United States Department of Energy can change the rates unilaterally, but its customers can 
terminate the services being charged at the new rates within two years of the effective date of the 
rate change (so long as they provide written notice of their intention to terminate within 90 days of 
the effective date of the new rate). Ms. Jurosek advises that this minimizes the City's risk if 
electrical power provided by WAPA at some point becomes more expensive than other options. 
However, even if the City terminates WAPA's services, the City would still be required to pay at the 
new rate for services consumed after the effective date of the rate change. 

4 According to Ms. Jurosek, while the City currently pays for more WAPA power than it actually 
uses on Treasure Island under the "take-or-pay basis" of the current WAPA contract, the City has 
been reimbursed at a "pool energy rate" for that portion of its electrical power allocation which it has 
not used but instead made available to other WAPA customers, or to the open market. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



actually constructed, the peak demand has been projected 
to be as high as 20 megawatts of electrical power. 

Ms. Jurosek states that the average cost of WAPA 
electrical power over the 20 year term is projected to be 
$50 per megawatt, based on an average 5 megawatt peak 
demand over a one year period, at a 55 percent load factor 
per year for 20 years. This would result in a projected 
annual cost of approximately $1,204,500 per year 5 which, 
over 20 years, would exceed the $20,000,000 cap approved 
by the Public Utilities Commission in its resolution of 
November 14, 2000 (see Comment No. 3). By contrast, if 
the City had to purchase that amount of electrical power 
on the spot market at today's prices, it could cost 
approximately $6,022,500 per year 6 , or $4,818,000 or 400 
percent more per year than power purchased under the 
proposed WAPA contract. Ms. Jurosek calculated the spot 
market figure on the basis of the short term average price 
for electrical power in December of 2000 of $250 per 
megawatt hour, noting that power exhange prices spiked 
as high as $1,500 per megawatt hour in December of 
1999 7 . 

3. Ms. Jurosek advises that the estimated cost of 
$1,204,500 per year for 20 years under the proposed 
WAPA contract would total $24,090,000, which exceeds 
the $20,000,000 cap approved by the Public Utilities 
Commission in its resolution of November 14, 2000. Ms. 
Jurosek states that the PUC will track its purchases 
under the proposed WAPA contract and if it believes that 
it will exceed the $20,000,000 cap, it will request approval 
of an increase in that cap by the Public Utilities 
Commission and the Board of Supervisors. 



5 Ms. Jurosek calculates the figure of $1,204,500 as follows: 5 megawatts x 24 hours x 365 days x 55 
percent average load factor = 24,090 megawatts x $50 = $1,204,500. 

6 Ms. Jurosek calculates the figure of $6,022,500 using the same assumptions about electrical power 
consumption on Treasure Island as above, as follows: 5 megawatts x 24 hours x 365 days x 55 
percent average load factor = 24,090 megawatts x $250 - $6,022,500. 

7 Ms. Jurosek notes, with regard to electrical power imported into California, that the highest price 
at the California-Oregon border thus far in FY 2000-01 has been $4,500 per megawatt hour, and that 
the highest price paid by Hetch Hetchy thus far in FY 2000-01 has been $800 per megawatt hour. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
5 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Contract Details 



4. Mr. Como states that the contract with the United 
States Department of Energy requires that the City 
indemnify and hold harmless the Federal Government 
against claims arising from the activities of the City. 
Therefore, this proposed resolution includes such an 
indemnification provision. Mr. Como states that the 
proposed indemnification provision poses minimal risk to 
the City because the City is purchasing a commodity from 
the Federal Government in the form of electrical power. 
According to Mr. Como, under a commodity purchase 
contract with the Federal Government, there is minimal 
probability that the Federal Government would be 
harmed by its contract to sell power to the City. 
Therefore, according to Mr. Como, it is fair to say that 
there is minimal risk to the City in indemnifying WAPA. 

5. The Administrative Code requires all City contracts to 
contain language regarding (a) a guaranteed maximum 
cost under a contract (Section 21.19), and (b) the 
consequences of submitting false claims to the City 
(Section 21.35). The proposed resolution would waive 
such requirements. According to Mr. Como, the United 
States Department of Energy insists on using its standard 
contract language for this contract and such language 
does not include the provisions that are required by the 
Administrative Code Sections 21.19 and 21.35. 

According to Mr. Como, there is no need for a contract 
maximum, as required by Section 21.19 of the 
Administrative Code. In approving the contract, the 
Public Utilities Commission has stipulated, in the PUC 
resolution approved on November 14, 2000, that total 
expenditures through the contract term ending on 
December 31, 2024 shall not exceed $20,000,000. That 
amount will be certified by the Controller. As the amount 
is calculated on the basis of the maximum volumes 
available to the City under the contract, greater 
expenditures would not be possible, according to Mr. 
Como. 

With regard to Section 21.35 of the Administrative Code, 
Mr. Como advises that, since the City is easily able to 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



verify the amounts of electrical power that are purchased 
and the price per kilowatt hour is stipulated in the 
contract, contract language regarding the consequences of 
submitting false claims to the City is unnecessary 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Items 2 and 3 - Files 00-1796 and 00-1797 

Note: This report is based on an Amendment of the Whole for both File 00-1796 
and File 00-1797 submitted by the Board of Appeals, which will be 
introduced at the January 10, 2001 Finance and Labor Committee Meeting. 
The Amendment of the Whole reclassifies the proposed new position from 
Special Assistant XV 1374L to Special Assistant XVI 1375L to reflect the 
current Planning Department position held by the individual that has 
assumed the duties of the Executive Secretary of the Board of Appeals. 

Department: Board of Appeals 

Items: Item 3 - File 00-1796: Ordinance appropriating $105,065 

from the General Fund Reserve to fund the salary and fringe 
benefits of a Special Assistant XVI at the Board of Appeals 
while the Executive Secretary is on medical leave, operating 
expenses and amending the Annual Salary Ordinance for FY 
2000-01. 



Amount: 
Source of Funds: 
Description: 



Item 4 - File 00-1797: Ordinance amending No. 181-00 
(Annual Salary Ordinance, 2000/01) reflecting the creation of 
one 0.61 FTE Special Assistant XVI 1375 Limited duration 
position at the Board of Appeals. 

$105,065 

General Fund Reserve 

File 00-1796: The Board of Appeals (BOA) is requesting a 
supplemental appropriation in the amount of $105,065 from 
the General Fun Reserve to fund overtime salaries and a 
0.61 FTE Special Assistant XVI 1375L Limited Duration 
position and provide additional funds for an existing 
Temporary Exempt 1426 Senior Clerk Typist position in the 
BOA. 

According to Ms. Catherine Johnson of the BOA, the BOA 
Executive Secretary suffered a stroke and went on sick leave 
on September 5, 2000. Ms. Johnson advises that since the 
Executive Secretary's departure, the existing BOA staff have 
been working overtime to ensure that the Appeal Hearings 
would continue, as scheduled. Therefore, Ms. Johnson 
advises that the BOA is requesting a supplemental 
appropriation for overtime in the amount of $7,660 for the 
period from September 18, 2000 through June 30, 2001, so 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

8 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

that the BOA staff can continue to staff the schedule Appeal 
—Hearings (See Comment 5). — — 



According to Ms. Johnson, the Executive Secretary is 
currently on sick leave and is therefore still on the BOA 
payroll. Ms. Johnson advises that Ms. Linda Avery from the 
Planning Department became the BOA Acting Executive 
Secretary on approximately November 29, 2000. In the 
proposed ordinances, Ms. Avery's position is coded as a 
Special Assistant XVI 1375L, a Limited Duration position 
that is intended to terminate at the end of FY 2000-2001. 
The proposed supplemental appropriation ordinance for 
$105,065 designates $62,184 of the supplemental 
appropriation for salary and $14,302 of the supplemental 
appropriation for fringe benefits. Ms. Myrna Lopez of the 
Mayor's Budget Office advises that the Special Assistant XVI 
1375 L position was prorated to 0.61 FTE because the 
Special Assistant XVI was intended to start as the Acting 
Executive Director in late November of 2000 (see Comment 
3). 

According to Ms. Johnson, when the Executive Secretary 
went on sick leave, the BOA had to increase the hours of its 
existing 1426 As-Needed Senior Clerk Typist from part-time, 
4 hours a day, to full-time, 8 hours a day, to help the BOA 
handle its caseload. Ms. Johnson notes that when the Senior 
Clerk Typist went to full-time, the BOA coded the position as 
Temporary Exempt so that the employee would be eligible for 
overtime pay. Ms. Johnson states that they will need to 
continue to have a Temporary Exempt 1426 Senior Clerk 
Typist full-time until the end of the fiscal year so that the 
Temporary Exempt Senior Clerk Typist can assist the Acting 
Executive Secretary in conducting the Appeal Hearings. 
Therefore, the BOA is requesting additional Temporary 
Salary funds for the Temporary Exempt 1426 Senior Clerk 
Typist from October 14, 2000 through June 30, 2001 in the 
amount of $20,919 (see Comment 4). 

File 00-1797: The proposed ordinance would amend the 
Annual Salary Ordinance to create the requested Special 
Assistant XVI 1375L position. As noted above, the position 
would be for a limited duration, terminating when the BOA 
Executive Secretary returns from sick leave, which Ms. 
Johnson anticipates would be at the beginning of FY 2001- 
2002. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Budget: 



Comments: 



The budget for the requested supplemental appropriation 
(File 00-1796) is as follows: 

Salary-Special Assistant XVI $62,184 

Fringe Benefits-Special Assistant XVI 14,302 

Temporary Salaries 20,919 

Overtime 7,660 

Total $105\065 

1. According to Ms. Lopez, as reflected in the Amendment of 
the Whole, Ms. Avery's position as Special Assistant XVI 
1375 is at the same classification as her position in the 
Planning Department. Ms. Avery advises that her title in 
the Planning Department was Chief of Personnel/ 
Commission Secretary. 

2. According to Ms. Lopez, Ms. Avery must be on the BOA 
payroll in order for Ms. Avery to have the authority to handle 
the purchasing, payroll and personnel matters for the BOA. 
According to Mr. Costilino Hogan from the Planning 
Department, Ms. Avery's position in the Planning 
Department would be backfilled by Planning Department 
employees during her absence, such that there would not be 
sufficient salary savings to transfer to the Board of Appeals 
to fully cover Ms. Avery's costs due to temporary promotions 
and salary increases for existing Planning Department staff. 
Furthermore, Ms. Lopez advises that, except on the initial 
interim basis, Ms. Avery's salary and fringe benefits should 
not be funded by the Planning Department's budget and then 
transferred to the BOA's budget, because it would be a 
conflict of interest to have the Planning Department pay for 
the salary of the Executive Secretary of the BOA, since the 
BOA is directly responsible for hearing appeals of permit 
cases from the Planning Department. 

3. According to Ms. Lopez, the Planning Department paid 
Ms. Avery's salary on an interim basis from November 29 
2000 through January 1, 2001. Ms. Lopez advises that a 
requisition was approved on January 2, 2001 to transfer Ms. 
Avery from the Planning Department to BOA, such that the 
BOA can now begin paying Ms. Avery's salary and fringe 
benefits as of the first week of January of 2001. The biweekly 
compensation for a 1375 Special Assistant XVI ranges from 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



$3,162 to $3,844, or from $82,212 to $99,944 annually. Ms. 
Avery is currently paid at tbe top step, or $99,944 annually. 

Tberefore, tbe Budget Analyst notes tbat tbe proposed 
supplemental appropriation for permanent salaries and 
fringe benefits should be reduced to reflect the actual timing 
of the proposed position from the end of November of 2000 
through June 30, 2001, as originally proposed, to January 2, 
2001 through June 30, 2001, as now intended and reflected 
below: 

Budget Analyst 
Proposed Supplemental Recommended Recommended 

Appropriation Request Amount Reductions 

Funding Uses 

Permanent Salary-Misc. Reg. (1375L Special Assistant XVI) 
$62,184 $49,972 $12,212 

Fringe Benefits 

$14.302 $11.494 $2,808 

Total 

$76,486 $61,466 $15,020 

4. The BOA total Temporary Salaries budget for Fiscal Year 
2000-01 is $15,684. The Budget Analyst notes that through 
December 8, 2000, the BOA expended $7,797 for Temporary 
Salaries, leaving a remaining balance of $7,887 for 
Temporary Salaries. The proposed Supplemental 
Appropriation includes a request for $20,919 of additional 
Temporary Salaries funds. 

As previously noted, the requested $20,919 of Temporary 
Salary funds were intended to pay an As-Needed Senior 
Clerk Typist, to increase his hours from part-time (4 hours 
per day) to full-time (8 hours per day), from October 14, 2000 
through June 30, 2001. However, according to Ms. Avery, two 
BOA Senior Clerk Typists recently left their positions at the 
BOA, including the one As-Needed Senior Clerk Typist, who 
was to receive the proposed increase in hours under the 
subject Supplemental Appropriation. Ms. Avery advises that 
one permanent Senior Clerk Typist left the BOA payroll on 
December 8, 2000 and the other Senior Clerk Typist, who 
was being paid with the Temporary Salary funds, left the 
BOA payroll on December 20, 2000. Ms. Avery hopes to fill 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



those two positions by early to mid February of 2001. 
Currently, according to Ms. Avery, the BOA has only one 
remaining As-Needed Senior Clerk Typist, who is now 
working four hours per day. 

Given that the requested $20,919 was originally intended to 
increase a part-time Senior Clerk Typist to full-time between 
October 14, 2000 and June 30, 2001, that this Temporary 
Senior Clerk Typist position was vacated on December 20, 

2000, and that another Temporary As-Needed Senior Clerk 
Typist is currently assisting the BOA four hours per day, the 
Budget Analyst estimates that the BOA needs additional 
requested Temporary Salary funds of $9,415 instead of 
$20,919, resulting in the following recommended reductions: 

Budget Analyst 
Proposed Supplemental Recommended Recommended 

Appropriation Request Amount Reductions 

Temporary Salaries 

$20,919 $9,415 $11,504 

5. The BOA total Overtime budget for FY 2000-01 is $4,110. 
The proposed request includes $7,660 for Overtime funds for 
the period from September 18, 2000 through June 30, 2001. 
However, the Budget Analyst notes that as of December 8, 

2001, the BOA expended a total of $3,917 of Overtime funds! 
leaving a remaining balance of $193. 

Since December 8, 2000, Ms. Avery advises there has been 
only one BOA hearing. According to Ms. Avery, no overtime 
expenses were incurred at that BOA hearing. There are 17 
hearings currently scheduled for the remainder of the fiscal 
year. Based on discussions with Ms. Avery, assuming an 
average of four hours of overtime are required per hearing, at 
an hourly rate of $39.36, this would result in a total 
remaining overtime cost of $2,676. Therefore, total additional 
overtime costs of $2,483 are projected for the balance of the 
fiscal year ($2,676 through June 30, 2001 less $193 
remaining balance). The proposed supplemental 
appropriation for Overtime should therefore be reduced as 
follows: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

1~2 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Budget Analyst 
Proposed Supplemental Recommended Recommended 

Appropriation Request Amount Reductions 

Overtime 

$7,660 $2,483 $5,177 

Recommendations: 1. Amend the proposed Supplemental Appropriation 
ordinance (File 00-1796) as follows: 



Proposed Supplemental 
Appropriation Reauest 


Recommended 
Amount 


Budget Analyst 

Recommended 

Reductions 


Funding Sources 

General Fund Reserve 
$105,065 


$73,364 


$31,701 


Funding Uses 

Permanent Salary-Misc. Reg. (1375L Special Assistant XVT) 
$62,184 $49,972 $12,212 


Fringe Benefits 
$14,302 


$11,494 


$2,808 


Temporary Salaries 
$20,919 


$9,415 


$11,504 


Overtime 

$7,660 


$2,483 


$5,177 


Total 

$105,065 


$73,364 


$31,701 



2. Approve the proposed ordinance (File 00-1796), as 
amended, and approve the amendment to the Annual Salary 
Ordinance (File 00-1797). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



' Memo to Finance and Labor Committee 
January 17, 2001 Finance and Labor Committee Meeting 

Item 4 - File 00-2087 



Department: 
Item: 



Amount: 
Source of Funds: 
Description: 



Assessor-Recorder's Office 

Ordinance appropriating $1,245,909 from the General Fund 
Reserve to fund: (a) litigation and mediation expenses 
associated with the Viacom assessment appeal ($223,887), (b) 
litigation expenses for the AT&T/TCI assessment appeal 
($215,000), (c) a contract with KPMG to design and implement 
a reengineering plan for the Assessor-Recorder's Office for 
Fiscal Year 2000-01 ($726,726), and (d) temporary salaries for 
customer service at the Assessor-Recorder's Office ($80,296). 

$1,245,909 

General Fund Reserve 

A. Viacom Assessment Appeal 

The proposed supplemental appropriation of $223,887 would 
fund legal and related expenses already incurred for the 
assessment appeals process over a dispute with Viacom Cable, 
Inc. According to Ms. Julie Van Nostern of the City Attorney's 
Office, Viacom initially filed an appeal with the Assessment 
Appeals Board in 1991, contesting both the assessed value of 
Viacom's cable signal distribution system and the assessed 
possessory interest taxes 1 owed by Viacom to the City for the 
years 1987 through 1991. Ms. Van Nostern advises that the 
appeal was later extended to include the years 1987 through 
1995. According to Ms. Van Nostern, Viacom had asked for a 
$23,000,000 refund in possessory interest taxes paid by 
Viacom to the City between 1987 and 1995. However, the City 
maintained that the requested refund should be approximately 
$12,000,000, plus accrued interest, for excess possessory 
interest taxes paid by Viacom to the City during that time. 

The City and Viacom agreed to mediate the dispute. Following 
the mediation, the parties agreed to a "Stipulation for 
Reduction in Assessed Values for 1987-1995" ("Stipulation"), 
and submitted the Stipulation to the Assessment Appeals 
Board. Ms. Van Nostern advises that the Assessment Appeals 



1 Possessory Interest Taxes are levied on private companies that use publicly owned property. In this 
particular instance, the City assesses possessory interest taxes on Viacom Cable's use of City streets 
and rights of way to provide for the cable company's cable distribution system. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



14 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Budget: 



Board approved the Stipulation on September 13, 2000 and 
reduced Viacom's assessment accordingly, resulting in a 
refund (including interest) to Viacom from the City in the 
amount of $19,967,286. Attachment I, provided by the City 
Attorney's Office, contains a summary of the Stipulation. 
According to Mr. Matthew Hymel of the Controller's Office, the 
City paid the settlement of $19,967,286 in FY 2000-01 using 
reserved Property Tax funds held for this purpose. 

The additional costs already incurred for the Viacom 
assessment appeal litigation and mediation as of October 31, 
2000 are as follows: 



Viacom Assessment Appeal 


Litigation 


Mediation 


Total 


Berliner and Kidder, 




$13,835 


$13,835 


Appraiser of Intangible Properties 








Diehl, Evans & Company, LLP, 


$8,563 


26,603 


35,166 


Auditor of Intangible Properties 








Rutan & Tucker, Representing the City before 


13.166 


56,249 


69,415 


the Assessment Appeals Board 








Freeland Cooper, Legal Advice 




32,264 


32,264 


John Clifford, 




13,750 


13,750 


Valuation of Possessory Interest 








JAMS 




58,851 


58,851 


Private Mediation Services 








City Attorney Delivery and Copying Costs 




606 


606 


Total 


$21,729 


$202,158 


$223,887 



Comments on 
Viacom Appeal: 



1. Ms. Bose Onyemem of the Assessor-Recorder's Office states 
that the Assessor-Recorder's Office's FY 2000-01 budget 
included $100,000 to pay for City expenses in the Viacom 
appeal case. According to Ms. Onyemem, as of December 20, 
2000, the Assessor-Recorder's Office had expended $52,410 of 
the total allocated amount of $100,000, leaving a balance of 
$47,590. Ms. Onyemem advises that the Assessor-Recorder's 
Office is now requesting the subject supplemental 
appropriation to fund $223,887, which the City already owes in 
incurred expenses. Because the proposed $223,887 
supplemental appropriation would fund costs that have 
already been incurred without first obtaining Board of 
Supervisors approval, the Budget Analyst recommends that 
the proposed ordinance be amended to provide for retroactive 
authorization. In addition, because the Assessor-Recorder's 
Office still has $47,590 in its FY 2000-01 budget for the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Viacom case, the Budget Analyst recommends that the 
proposed ordinance be amended to reduce the supplemental 
appropriation request for costs related to Viacom by $47,590 
from $223,887 to $176,297. Ms. Van Nostern does' not 
anticipate future costs related to the Viacom assessment 
appeal. 

2. According to Ms. Onyemem, the Board of Supervisors has 
appropriated a total of $1,368,692 since FY 1997-98 for 
litigation and mediation costs related to the Viacom 
assessment appeal. Attachment II, provided by the Assessor- 
Recorder's Office, contains a breakdown of the Assessor- 
Recorder's actual costs by fiscal year. 



Description: B. AT&T/TCI Avveal Litigation Expenses 

On July 31, 1996, Telecommunications, Inc. (TCI) acquired 
Viacom's interest in the City's Cable Television franchise. TCI 
was subsequently taken over by AT&T on March 9, 1999. 
According to Ms. Van Nostern, AT&T/TCI has appealed its 
assessments for the years 1996 through 1999 to the 
Assessment Appeals Board, contesting the assessed value of 
more than $200 million in property. Ms. Van Nostern advises 
that the parties agreed to stay these appeals pending 
resolution of the Viacom case discussed above, but that either 
party can reinstate the appeals on 270 days notice, meaning 
that the City must be ready to prepare and present its case in 
as little as nine month's notice. Ms. Van Nostern advises that 
the City Attorney's Office is working with the Assessor- 
Recorder's Office to develop an assessment strategy for 
AT&T/TCI, which will avoid the costly litigation associated 
with the Viacom case. 

The proposed ordinance would appropriate $215,000 to fund 
the estimated costs in FY 2000-01 of responding to the 
AT&T/TCI legal appeal. Ms. Van Nostern advises that because 
the AT&T/TCI assessment appeal is a new case, no funds were 
included in the FY 2000-01 budget for the Assessor-Recorder's 
Office, and no funds have been expended on this case in 
previous fiscal years. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Budget: 



The estimated FY 2000-01 costs for the AT&T/TCI 
assessment appeal process are as follows: 



AT&T/TCI Assessment Appeal 




Estimated 
Costs 


Rutan & Tucker — Outside Tax Counsel 






320 hours times $225/hour 




$72,000 


Expenses 




13.000 




Subtotal 


$85,000 


Freeland Cooper — Outside Litigation/Mediation Counsel 






65 hours times $295/hour 




19,175 


Expenses 




825 




Subtotal 


$20,000 


Diehl, Evans & Company, LLP - Valuation of Cable Companies 




140 hours times $200/hour 




28,000 


Expenses 




7.000 




Subtotal 


$35,000 


John Clifford — Valuation of Possessory Interest 






310 hours times $225/hour 




69,750 


Expenses 




5.250 




Subtotal 


$75,000 


Total 


$215,000 



Comments on 
AT&T/TCI Case: 



1. According to Ms. Van Nostern, the City Attorney's Office 
based their FY 2000-01 cost estimates for the AT&T/TCI 
assessment appeal process on the hours, legal advice and 
assessment services required for the Viacom assessment 
appeal process described above. Ms. Van Nostern advises that 
the estimated $215,000 in costs for the AT&T/TCI case during 
FY 2000-01 does not include costs for mediation or for 
Assessment Appeals hearings, should they be necessary. Ms. 
Van Nostern advises that if mediation or hearings are 
required, the Assessor-Recorder's Office will include funds for 
legal costs in the department's FY 2001-02 budget request. 

2. According to Ms. Van Nostern, all of the firms listed in the 
above budget were selected on a sole source basis, based upon 
their expertise related to property assessment and the cable 
industry. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



17 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Description: C. Contract with KPMG for Reengineering Plan 

The proposed supplemental appropriation for $726,726 would 
expand an existing $400,000 contract with KPMG to develop 
and implement a reengineering plan, for a total contract cost 
of $1,126,726, for the Assessor-Recorder's Office for Fiscal 
Year 2000-01. This reengineering plan analyzes the 
department's work processes in order to identify changes the 
department must make to run more effectively. Ms. Onyemem 
advises that the Assessor-Recorder's Office originally 
contracted with KPMG, in consultation with the Mayor's and 
Controller's Offices, in June of 2000 to improve efficiencies in 
the department. KPMG agreed to identify and re-engineer 
process inefficiencies, conduct a training needs assessment, 
provide necessary training, improve customer service and 
help the department transition into a new computer system. 
The Assessor-Recorder's Office included $400,000 in its FY 
2000-01 budget for this KPMG contract. Ms. Onyemem 
advises that the Assessor-Recorder's Office negotiated with 
the Controller's Office to include this $400,000 contract within 
a larger City contract with KPMG (discussed further in 
Comment No. 3 below). 

According to Ms. Onyemem, in September of 2000, and again 
in October of 2000, the Assessor-Recorder's Office requested 
that KPMG revise and expand the scope of its work plan in 
the three ways listed below. The Budget Analyst notes that 
the Assessor-Recorder's Office did have authority to request 
from KPMG proposals for expanding the scope of the existing 
$400,000 contract. However, the Assessor-Recorder's Office 
did not have the authority to finalize the expanded contract 
discussed below without first obtaining approval from the 
Board of Supervisors of this subject additional appropriation 
of $726,726. 

(1) After KPMG and the Assessor-Recorder's Office agreed to 
the terms of the original $400,000 contract, in September of 
2000 the Assessor-Recorder's Office directed KPMG to help 
manage and facilitate the reduction of the department's 
backlog in processing deeds, a priority for the Assessor- 
Recorder's Office. 2 In addition, KPMG proposed to expand 



2 According to Ms. Onyemem, the Assessor-Recorder's Office experienced a total backlog of 
approximately 32,000 deeds during 1999 and 2000. Ms. Onyemem advises that the transition to the 
department's new computer system delayed the processing of new deeds. The Assessor-Recorder's 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



the original contract to provide a more extensive 
reengineering plan and performance measures for the 
department. The proposed expanded work plan would 
expand the original contract by $207,926, from $400,000 to 
$607,926. 

(2) In October of 2000, KPMG agreed to expand the scope of its 
contract with the Assessor-Recorder's Office for additional 
fees to KPMG of $172,664, which would increase the 
contract again from $607,926 to $780,590. This expanded 
scope focuses on developing a new management strategy 
and reorganizing the department. 

(3) Finally, the Assessor-Recorder's Office has a proposal from 
KPMG to implement the reengineering plan at. a cost of 
$346,136, which would bring the total cost of the contract 
with KPMG to $1,126,726. 

These three modifications result in the total subject request of 
$726,726 in additional costs for the contract with KPMG. A 
summary budget for the total proposed contract costs of 
$1,126,726 with KPMG is as follows: 



SUMMARY 




Reengineering Plan 
Original Budget 
Expanded Scope/Deed Backlog 


$400,000 
207,926* 


Revised Subtotal 


$607,926 


Expanded Scope/Management Plan 
Implementation of Reengineering Plan 


172,664* 
346,136* 


Total Contract Costs 


$1,126,726 



*Total of $726,726, which is the subject of this request. 

The proposed $726,726 supplemental appropriation would fund: 
(a) KPMG's work decreasing the backlog in processing deeds 
($207,926), (b) the expanded scope of KPMG's reengineering 
plan for the department ($172,664), and (c) implementation of 
the reengineering plan ($346,136), for a total FY 2000-01 
contractual services costs of $1,126,726, including the original 
budget of $400,000, as shown in the table above. As shown in 
the table on the following page, the hourly rage being charged 
by KPMG ranges from $121.28 to $281.14. 



Office, with the assistance of KPMG, is now working to correct inaccurate deed information and 
process or re-process deeds from 1999 and 2000. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Budget for 
Reengineering Plan: 



The budget for the proposed $1,126,726 contract with 
KPMG, including the subject $726,726 supplemental 
appropriation, is as follows: 



Contract with KPMG 


Hourly 


Number 


Total 




Rate 


of Hours 




Reengineering Plan 








Professional Fees 








Managing Director 


$281.14 


32 


8,997 


Project Manager 


$165.38 


418 


69,129 


Senior Consultants 


$148.84 


408 


60,727 


Consultants . 


$148.84 


492 


73,229 


Analysts 


$148.84 


504 


75,016 


Sub-contractor 

Subtotal Professional Fees 


$121.28 


36 


4,366 


1,890 


$291,464 


Deed Backlog Completion 








Professional Fees 








Managing Director 


$281.14 


8 


2,249 


Project Manager 


$165.38 


422 


69,790 


Senior Consultants 


$148.84 


904 


134,551 


Analysts 

Subtotal Professional Fees 


$148.84 


144 


21,433 


1,478 


$228,023 


Total Professional Fees 




3,368 


519,487 


KPMG's Other Expenses* 






88,439 


**Subtotal Reengineering/Backlog 




3,368 


$607,926 


Expanded Scope/Management Plan 








Professional Fees 








Managing Director 


$281.14 


240 


$67,474 


Project Manager 


$165.38 


320 


52,922 


Senior Consultants 

Subtotal Professional Fees 


$148.84 


200 


29,768 


760 


$150,164 


KPMG's Other Expenses 






22,500 


**Subtotal Management Plan 




760 


$172,664 


Estimates for 








Implementation of Reengineering Plan 








Professional Fees 








Managing Director 


$281.14 


200 


$56,228 


Project Manager 


$165.38 


400 


66,152 


Senior Consultants 


$148.84 


400 


59,536 


Analysts 

Subtotal Professional Fees 


$148.84 


800 


119.072 


1,800 


$300,988 


KPMG's Other Expenses 






45,148 


Subtotal Implementation Estimates 




1,800 


$346,136 


Total KPMG Contract 




5,928 


$1,126,726 


Less $400,000 included in FY 2000-01 Budget 






(400,000) 


Total Supplemental Appropriation 






$726,726 



Other Expenses include mileage, parking, meals and housing. 
* Already expended or incurred (See Comment No. 1 below). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Attachment V, provided by the Assessor-Recorder's Office, 
contains an explanation for how KPMG estimated the 
$346,136 shown in the budget above to implement the 
reengineering plan. 

Comments on 

Reengineering Plan: 1. Ms. Onyemem reports that as of October of 2000, the 
Assessor-Recorder's Office had already incurred expenses for 
$387,497 of the $400,000 included in the department FY 
2000-01 budget for the KPMG contract, leaving a balance of 
$12,503. According to Ms. Onyemem, the Assessor-Recorder's 
Office has continued incurring expenses for services provided 
by KPMG since October of 2000, although the Assessor- 
Recorder's Office is unsure of the exact amount of these 
additional fees since the department has not received a bill 
from KPMG since October of 2000. The Budget Analyst notes 
that, according to Ms. Onyemem, KPMG has agreed to 
complete its reengineering plan and its work to reduce the 
deed backlog by January 31, 2001, at which time the 
Assessor-Recorder's Office will owe to KPMG the balance of 
$393,093 for these two projects (the $12,503 balance of funds 
included in the department's FY 2000-01 budget for the 
contract with KPMG, $207,926 for deed backlog reduction, 
and $172,664 for the expanded scope/ management plan). The 
Budget Analyst notes that the Assessor's Office has incurred 
these additional costs of up to $393,093 without first 
obtaining prior appropriation approval by the Board of 
Supervisors. The current contract with KPMG is limited to 
$400,000. The Assessor-Recorder's Office did not have the 
authority to finalize an expanded contract with KPMG 
without first obtaining prior appropriation approval by the 
Board of Supervisors. The Budget Analyst recommends that 
the proposed ordinance be amended to provide for retroactive 
authorization. 

2. According to Ms. Onyemem, KPMG has agreed to complete 
the proposed contract with the Assessor-Recorder's Office, 
including implementation of the reengineering plan, by June 
30, 2001. Ms. Onyemem advises that KPMG has agreed to the 
fees and expenses outlined in the budget above at a maximum 
cost of $1,126,726. If KPMG exceeds the allotted hours to 
complete the workplan, as agreed upon by both parties, 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

21 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



KPMG will not charge the Assessor-Recorder's Office 
additional fees for those hours. 

3. According to Ms. Onyemem, the Assessors Office negotiated 
with the Controller's Office to include the original $400,000 
contract with KPMG within a larger City contract with 
KPMG in order to begin a reengineering of the department's 
business practices as soon as possible. According to Mr. 
Hymel of the Controller's Office, these services are included in 
the Controller's City-wide audit contract with KPMG. Mr. 
Hymel advises that this contract, which was competitively bid 
and approved by the Civil Service Commission in May of 
1999, allows the City to contract with KPMG for as needed 
auditing and accounting services. The contract with KPMG is 
a three-year contract with two one-year renewal options. 
According to Mr. Hymel, although this three-year contract 
between the City and KPMG does not specify a maximum 
dollar amount, the Civil Service Commission has approved a 
total $7 million for the City-wide audit contract. Mr. Hymel 
advises that to date the Controller's Office has expended 
approximately $4 million of the $7 million contract, not 
including the $387,497 already incurred from the original 
$400,000 contract between the Assessor-Recorder's Office and 
KPMG. Mr. Hymel advises that the original KPMG contract 
for the Assessor-Recorder is limited to $400,000, which was 
included in the FY 2000-2001 Assessor-Recorder budget. If 
approved by the Board of Supervisors, the proposed 
supplemental appropriation would increase this contract with 
KPMG by $726,726, for a total in contractual services costs of 
$1,126,726. 



Description: D. Temporary Salaries 



The proposed supplemental appropriation would fund $80,296 
in Temporary Salaries to help improve customer service at the 
Assessor-Recorder's Office. Ms. Onyemem advises that the 
Assessor-Recorder's Office would use the $80,296 to hire four 
temporary employees who will be assigned to answering 
phone calls from the public and addressing questions and 
problems posed by the public. Ms. Onyemem advises that 
these temporary employees would allow the Assessor- 
Recorder's Office to decrease its backlog of deed processing 
and respond to the increase in customer complaints due to 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Budget: 



this backlog, as stated in Attachment VI, provided by the 
Assessor-Recorder's Office. 

The budget for the proposed $80,296 supplemental 
appropiation for Temporary Salaries, for the period from 
February 1, 2001 through June 30, 2001, is contained in the 
table below. This $80,296 supplemental appropriation would 
increase the department's budget for Temporary Salaries from 
$20,808 to $101,104. 



No. ofFTE 
Positions 


Class 


Title 


Step 3 

Biweekly Salary 

(Annual) 


Cost 


0.78 


1368 


Special Assistant 

(2 positions, for 10 pay periods each) 


$2,110 
($54,860 each) 


$42,428 


0.78 


8108 


Senior Legal Process Clerk 

(2 positions, for 10 pay periods each) 


$1,596 
($41,496 each) 


32,093 


Subtotal Salaries 




$74,521 


Employer Taxes 




5,775 


Total 


$80,296 



Comment on 

Temporary 

Salaries: 



Ms. Onyemem advises that the Assessor-Recorder's Office has 
modeled its proposed improvements to customer service on 
improvements implemented in the Office of the Treasurer/Tax 
Collector. According to Ms. Onyemem, if the customer service 
to be provided by the proposed temporary employees proves to 
be successful in addressing customer concerns, the Assessor- 
Recorder's Office may request permanent positions in its 
budget for FY 2001-02. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Recommendations: Viacom Assessment Appeal 



1. Amend tbe proposed ordinance to reduce the 
supplemental appropriation request for costs related to 
Viacom by $47,590, from $223,887 to $176,297, in 
accordance with Comment No. 1 in the section above 
addressing the Viacom assessment appeal. 

2. Amend the proposed ordinance to provide for retroactive 
authorization to appropriate $176,297 for costs previously 
incurred without first obtaining prior appropriation 
approval from the Board of Supervisors, in accordance with 
Comment No. 1 in the section above addressing the Viacom 
assessment appeal. 

3. Approve the proposed supplemental appropriation of 
$176,297, as amended, for costs resulting from the Viacom 
assessment appeal process. 

ATT/TCI Assessment Appeal 

Approve the proposed supplemental appropriation of 
$215,000 for costs resulting from the AT&T/TCI assessment 
appeal process. 

KPMG Contract for Reengineering Project 

1. Amend the proposed ordinance to provide for retroactive 
authorization to appropriate for costs previously incurred 
without first obtaining prior appropriation approval from 
the Board of Supervisors. As stated in Comment No. 1 in the 
section above addressing the proposed contract with KPMG, 
the Assessor-Recorder's Office has been incurring expenses 
above the $400,000 originally budgeted for the KPMG 
contract for services provided by KPMG since October of 
2000, however the department is unsure of the exact 
amount since they have not received any bills from KPMG 
since October of 2000. 

2. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors because the 
Assessor-Recorder's Office did not have the authority to 
incur such costs of up to $393,093 above the $400,000 
originally budgeted for the KPMG contract without first 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

Ik 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



obtaining prior appropriation approval from the Board of 
Supervisors. 



Temporary Salaries 

Approve the proposed supplemental appropriation of 
$80,296 for Temporary Salaries. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Attachment I 



Assessment Appeals Board Stipulation 

Between City and County of San Francisco and Viacom 

for Reduction in Assessed Value of the Possessory Interest 

and Business Personal Property 



EXECUTIVE SUMMARY 



I. Possessory Interest 

The Assessor's original $188 million valuation of the 1987 Possessory Interest 
was San Francisco's portion of a 10-county appraisal. This appraisal utilized a 
methodology that was subsequently invalidated by a number of post-1991 California 
court decisions. Throughout the assessment appeal hearing, the Assessor has 
acknowledged the need to revalue the Possessory Interest using a permissible method. 
The Assessor used an income method appraisal, which resulted in a 1987 value of $106 
million. Approximately 75% of the combined Possessory Interest value reductions 
contained in the Stipulation directly result from correcting the 10-county appraisal to 
conform to the new court cases. The remaining Possessory Interest value reductions 
relate to the economic recession beginning in 1991 and the re-regulation of the cable 
industry beginning in 1992 which resulted in forced cable rate reductions. 



II. Business Personal Property 

Three categories of business personal property are the subject of the hearings: 
converters/descramblers, the cable distribution system and house drops. With respect to 
the first two categories, the parties presented valuations at the hearings based on the 
"replacement cost new less depreciation" method. In reaching agreement on stipulated 
values, the parties used the same valuation method, adopting inputs as to original cost, 
useful lives and depreciation that fell within the range of evidence in the record on those 
issues. The Stipulation treats the entire house drop as taxable and adopts a valuation 
approach consistent with that used for the other two categories. 



III. Conclusions 

All valuations contained in the Stipulation are supported by substantial evidence 
in the record and the exhibits to the Stipulation. 



Source: City Attorney's Office 



Lio»AMm£r..^i u n> m ^ 1 



/ 



Attachment II 



ASSESSOR-RECORDER 
VIACOM LITIGATION 

Budget 
12/12/97-12/19/00 



Revised 
Budget Supplemental Budget Encumbrance Actual Balance 



FY 1997-98 


450,000 




450.000 




282.790 


167.210 


FY 1998-99 


250,000 




250,000 




375,100 


42.110 


FY 1999-00 


300,000 


284,887 


584,887 


3.440 


590.420 


33.137 


FY 2000-01 


100,000 




100.000 




120,382 


12.755 




1,100,000 


284,887 


1,384,887 


3,440 


1,368,692 





Source: Assessor-Recorder's Office 



Attachment III 
Page 1 of 2 



KPMG CONSULTING 
BUSINESS PROCESS REENGINEERING PROJECT CHRONOLOGY 

■ June 2000 - KPMG Consulting is retained by the City and County to perform a 
business process reengineering (BPR) review of the Assessor-Recorder's Office. This 
project is to begin July 1, 2000. 

■ July 2000 - KPMG Consulting initiates the BPR project on or about July 1 st . Shortly 
after the project is initiated, KPMG Consulting is asked by the Assessor-Recorder and 
the Mayor's Office to refocus their efforts on the deed backlog. At this time all BPR 
tasks are suspended and the KPMG Consulting team focuses on coordinating the deed 
backlog effort. 



■ 



September 28, 2000 - KPMG Consulting submits a revised scope of work to the 
Assessor-Recorder which: , 

. Adds hours and cost associated with the coordination of the deed backlog 

. Deletes elements (hours and cost) of the original BPR project to mitigate the 
financial impact to the City and County. 

October 18, 2000 - Additional items are added to KPMG Consulting's scope by the 
Assessor- Recorder's Office and the Mayor's Office. These include the: 

. Review of day-to-day management and operations of the Assessor-Recorder's 
Office with recommendations for improvement. 

. Development of a revised management and organization structure for the 
Assessor-Recorder's Office. 

. Preparation of a Project Management Plan to address the recommendations of 
the Management and Organization and Business Process Reengineering Reports. 

October 31, 2000 - KPMG Consulting transitions the monitoring and reporting of the 
deed backlog to the Assessor-Recorder's Office and refocuses on the BPR project (per 
the September 28 th revision). 

November 1, 2000 - The Assessor- Recorder's Office requests that KPMG Consulting 
provide an estimate of costs to provide support during the implementation of 
recommendations (February 1, 2001 - June 30, 2001). 

November 20, 2000 - KPMG Consulting submits the "As-Is Process Flows", the first of 
the BPR project deliverables, to the Assessor-Recorder's Office Project Steering 
Committee. 

Source: Assessor-Recorder's Office 



kM& Consulting A 1 



Attachment III 
Page 2 of 2 



KPMG CONSULTING 
BUSINESS PROCESS REENGINEERTNG PROJECT DELIVERABLES 

■ Business Process Reengineering deliverables include: 

. "As-Is Process Flows" - November 20, 2000 (Completed) 

. "To-Be Process Flows" - January 5, 200 1 

. Draft Report of Recommendations - January 1 5, 200 1 

. Final Report of Recommendations - January 3 1 , 200 1 

■ Coordination of Deed Backlog Effort included the following deliverables (through 
October 3 1,2000): 

. Facilitation of daily status meetings (Completed) 

. Daily production reports (Completed) 

. Daily quality assurance/control reports (Completed) 

. Daily issue log (Completed) 

. Development of deed processing process flows (for use as an interim process 

only) (Completed) 
. Development of quality assurance/control process flows (Completed) 
. Monthly status updates to Assessor-Recorder, Tax Collector, Controller, and 

Mayor's Office (Completed). 

■ Management and Organization Project deliverables include: 

. Draft Report of Recommendations - January 1 5, 200 1 

. Draft Project Management Plan- January 15, 2001 

_ Final Report of Recommendations- January 31, 2001 

. Final Proj ect Management Plan - January 3 1 , 200 1 

■ Implementation Support deliverables will be determined when project scope and 
approach is finalized on or about February 1, 2001. 



WJ& 



Consulting 



Attachment IV 
Page 1 of 2 



Source: Assessor-Recorder's Office 

December 19, 2000 

TO: Budget Analyst 

FROM: Bose Onyemem 

RE: Request for Supplemental -KPMG 



Reengineering Project-Attachment 

1. Describe the project both development and implementation 
Development — KPMG will establish a comprehensive public service unit -: 

• identify inefficient processes 

• develop solutions for improvements 

• document "as is " processes 

• research best practices 

• identify and train staff 

• review and refine job classifications, 

• identify and recommend facilities enhancement, 

• establish performance measures and 

• monitor results. 

Implementation-KPMG will implement process improvement plan 

• conduct a training needs assessment 

• provide necessary training 

• implement changes and monitor performance 

• transfer knowledge to selected Assessor-Recorder resources 

• develop recommendations for additional staff development 

a) How much was originally budgeted for the entire project? 

• Original estimate by KPMG for reengineering was for 2800 hours at $477,895, 
(399,820-professional fees and $78,075 other expenses), however the 
department only has a funding allocation of $400,000 in the budget. 

What is the new total project costs? 

Hours Professional Other 





Fees 


Expenses 


Total 




Reengineering/Deed Backlog 


3,368 


$519,487 


$88,439 


$607,926 


Expanded scope 


760 


150,164 


22,500 


172,664 


Implementation -estimate 


1.800 


300.988 


45.148 


346.136 




5,928 


970,639 


156.087 


1.126.726 



2 Why do you need the funds you are requesting, in addition to the money that was 
already 2000-01? 

• Rengineering/Deed Backlog $607,926 Will be completed by 1/31/2001 

• Expanded scope 172.664 

• Total Expenses 780,590 

• Available per budget 400,000 



-ME00014.doc 



?n 



Attachment IV 
Page 2 of 2 



• Current deficit 380,590 

• Estimate-Implementation 346.136 

• Amount required $726,726 

3. State why you need KPMG to implement the program, rather than the Assessor's 
office doing it themselves. - 

• To provide a more objective analysis of best practices and implement successfully, it's more 
prudent to bring in an independent consultant with diverse skills in government 
reengineering process 

4. State how you selected KPMG. ..why are you using an existing contract between 
The Controller and KPMG, rather than undergoing your own RFP/Contract process. 

• Since the Controller already has a City certified contract with KPMG coupled with the time 
frame constraint to start the reengineering process in July 2000 and resolve the assessment 
roll backlogs, it was more expedient and prudent to use the controller certified contract 
rather than wait through the 4 months approval process for consulting service. 

6. Have you expended any Assessor's Office staff time or other department funds 
for this project. If so, how much have you spent and how much was budgeted in FY 
2000-01 for this use (include details in the budget requested below). 

• 

• No 

Please provide a detailed budget of the entire reengineering project, which includes: 
a) Details for how you spent the approximate $400,000 already budgeted for the 

Reengineering Project 





Professional 




Other 




Month 


Hrs 


Fees 




Expenses 


Total 


• July 


521 


$79,382 




7,180 


86,562 


• August 


520 


80,440 




9,364 


89,804 


• September 


472 


74,090 




10,313 


84.4031 


• Octobe r 


673 


107.694 




19.034 


126.728 


. 


2.177 


341.606 




45.891* 


387.497 


"Other expenses incl 


ude 










■ Daily per diem rates - 


I 


Lodging-$158.00 








I 


Food 


46.00 




Average dail\ 


r parkinc 


j fees 




14.00 





Mileage is billed at .325. mile 



b) KPMG: Hourly fees charged, around and kind of staffing to be provided 

• Sub-contractor $121.28/hr. 

• Senior Consultants 148.84/hr. 

• Project Manager 165.38/hr. 

• Managing Director 281.14/hr. 

c) Details for any Assessor staff time or other costs (if staff time has been used, 
include classifications and salaries) 

• None 



-ME00014.doc 



, x Attachment V 

■ ■■■ Pase 1 of 2 



Consulting 



400 Capitol Mail, Suite 800 Telephone 916 554-1114 Fax 916 551 3030 

Sacramento, CA 95814 



November 1, 2000 



Ms. Bose Oneyeman 
Assessor-Recorder's Office 
City and County of San Francisco 
City Hall 

1 Dr. Carlton B. Goodlett Place 
San Francisco, CA 94102-4694 

Dear Ms. Oneyeman: 

KPMG Consulting is pleased to present you with our estimate of the professional fees and 
expenses associated with the implementation of the Business Process Reengineering (BPR) 
study. 

Background 

KPMG Consulting is currently engaged in conducting a BPR study for the City and County of 
San Francisco's Assessor- Recorder's Office. Per our revised scope of work dated September 28, 
2000, KPMG Consulting anticipates completing the BPR study, including the creation of a 
customer service unit, in January 2001. We have been asked to provide the City and County of 
San Francisco with an estimate of the professional fees and expenses associated with 
implementing the recommendations made in the BPR study. 

Proposed Implementation Schedule and Costs 

Based on our prior experience with similar implementation engagements, we estimate it will take 
approximately 1,800 hours of staff time to assist the Assessor-Recorder's Office with the 
implementation of the BPR. Given our plan to complete the BPR study in January 2001, we 
anticipate implementation beginning on February 1, 2001 and concluding on June 30, 2001. 
Based upon current contracted rates with the City, we estimate we can assist the Assessor- 
Recorder's Office with the implementation of the BPR study for a total of $346,136. This 
includes $300,988 in professional fees and $45,148 in expenses. Exhibit 1 on the following 
page shows the estimated staffing plan, by month, as well as the City approved rates effective 
through 06/30/01. 



KPMG Consuttng. UC- KPMG C«m«r>g. LLC is ) iubvdxy d 



J55SP 



Consulting 



Attachment V 
Page 2 of 2 



Ms. Bose Oneycman 

City and County of San Francisco 

November 1. 2000 



Exhibit 1: Hours by Month 












Month 


Managing 
Direcior 
(O'Neill/ 

Pierce) 


Manager 
(Rohxbach) 


Senior 
Consultant 
(Chatters) 


Analyst 
(Anderson) 


Total 


February 


40 


80 


80 


200 


400 


March 


40 


80 


80 


200 


400 


April 


40 


80 


80 


150 


350 


May 


40 


80 


80 


150 


350 


June 


40 


80 


80 


100 


300 


Total Hours 


200 


400 


400 


800 


1,800 


Rate per Hour 


$281.14 


$165.38 


$148.84 


$148.84 




Total Professional Fees 


$56,228 


$66,152 


$54,536 


$119,072 


S300,988 



KPMG Consulting will provide the Assessor-Recorder's Office with a detailed implementation 
plan in December 2000. Should you have any questions or concerns, please do not hesitate to 
contact me at 415-554-5657. 

Very truly yours, 
KPMG Consulting LLC 



V.&A- 



Micaela V. Ochoa 
Manager 



-"■• Attachment VI 

Source: Assessor-Recorder's Office 

December 19, 2000 

TO: Budget Analyst 

FROM: Bose Onyemem 

RE: Request for Supplemental -Temporary Salaries 



Annual 
Salary 
Step 3 Cost 

1 . Special Assistant IX, Class 1 368 

(.39 FTE, 2 positions at $2,110 B/W for 1 0.833 pay periods) $54,860 $42,428 

Senior Legal Process Clerk Class 8108 

(.39 FTE, 2 positions at $1,596 B/W for 10.833 pay periods) 41,496 32,093 

Subtotal Salaries $74,521 

Employer Taxes 5,775 

Total $80,296 

2. What the employees will be doing (describe duties for each classification) 
8108-Senior Legal Process Clerks will respond to customer's complaints in a courteous, prompt and 
efficient manner within one working day. Research computer information for Assessor-Recorder parcels 
and deeds and provide prompt and accurate information to the public. 

1368-Special Assistant IX- Under general administrative direction, coordinate prompt and accurate 
response to taxpayers. Ability to work under pressure and deal effectively, courteously and efficiently 
with the public. Ability to work and make independent decisions Extensive knowledge of Assessor- 
Recorder operations is required. Ability to speak English, Spanish /Chinese. 

3. Why do you need them?. 

There has been an increase in the number of complaints by the public over the use of voice mail to 
address questions. In order to promote good public relations and earn overall positive response of at 
least 80 percent from taxpayers, it is important that the Office of the Assessor-Recorder maintains a 
customer section with staff ready to address taxpayers/public concerns efficiently and promptly 
The Customer service section will be modeled after the Tax Collector's Customer Service section 

4. Why did you not request them in your budget request for FY 2000-01 

During the budget preparation phase of FY 2000-01 , the department was already negotiating with 
KPMG to establish an effective office operation and improved customer service . The department 
decided to wait for the KPMG recommendation before implementation. 

5. How much you have budgeted in FY 2000-01 for Temporary 

$20,808 budgeted to fund temporary employees needed to clear the assessment rolls backlog. 

How much have you spent on Temporary Salaries to date. 

Nothing 

6. Explain why you will no longer need the employees after the end of this fiscal year. 

The positions are funded for 5 months in the current fiscal year. The positions may be included in FY 
2001-2002 budget request pending the outcome of KPMG reengineering recommendation. 



-ME00014.doc 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Items 5 and 6 - Files 00-2184 and 00-2183 



Department: 
Items: 



Amount: 
Source of Funds: 

Description: 



Department of Child Support Services 

File 00-2184 : Ordinance appropriating $839,562 to 
implement a new State-required Customer Service Unit, 
including the creation of two new investigator positions 
and related operating costs at the Department of Child 
Support Services. 

File 00-2183 : Ordinance amending the Annual Salary- 
Ordinance for Fiscal Year 2000-01 (Ordinance No. 181-00) 
reflecting the creation of two new positions in the 
Department of Child Support Services. 

$839,562 

The entire $839,562 supplemental appropriation would be 
funded by State and Federal monies, administered by the 
State Department of Child Support Services. 

California Family Code Section 17304, signed into law in 
1999, required all counties in California to create a 
separate Department of Child Support Services, which 
would be independent from other local departments and 
report directly to the new State Department of Child 
Support Services (the "State"). In San Francisco, the new 
City Department of Child Support Services began 
functioning independently on July 1, 2000. Previously, 
child support services had been provided by the Family 
Support Bureau, a division of the District Attorney's 
Office. According to Mr. Merlin Zimmerly of the 
Department of Child Support Services, the department's 
budget is funded entirely by State and Federal funding, a 
requirement of the State law mandating separation of the 
Family Support Bureau from the District Attorney's 
Office. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



File 00-2184 : The proposed ordinance would appropriate 
$839,562 to support both operating costs and the 
implementation of a State-required new Customer Service 
Unit. 

The Department of Child Support Services would use the 
proposed $839,562 supplemental appropriation as follows: 

Customer Service Unit ($335.316) 

According to Mr. Zimmerly, the State law mandating an 
independent department for Child Support Services also 
required that each such department create a Customer 
Service Unit by January 1, 2001. Mr. Zimmerly advises 
that the Customer Service Unit will conduct outreach to 
inform the public of services provided by the department, • 
work to make child support programs more accessible, 
address citizen complaints, and work to make the court 
process more understandable and comfortable for 
participants in child support programs. Attachment I, 
provided by the Department of Child Support Services, 
contains the $335,316 spending plan submitted to and 
approved by the State. 

Attachment II, provided by the Department of Child 
Support Services, contains an explanation of the staffing 
at the new Customer Support Unit, including a 
justification for the two new investigator positions. In 
addition to the requested two new investigator positions 
described below, the staff of the new Customer Service 
Unit will also consist of three existing ombudsman 
positions, for a total of five positions. According to Mr. 
Zimmerly, the one existing investigator position of the 
Department of Child Support Services is currently 
performing customer services functions in order to meet 
the January 1, 2001 State mandate. 

Work Order to Sheriffs Department ($144.945) 
The Department of Child Support Services requires that 
two security guards be stationed at the department's front 
door to operate a metal detector and to remove any 
weapons brought into the office by clients. In addition, as 
part of the department's investigations of absent parents, 
the department must have access to criminal justice 
records stored in the California Law Enforcement 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



IS 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Telecommunications System (CLETS), which can only be 
operated by peace officers according to State law. 
Therefore, the proposed supplemental appropriation 
would fund a $144,945 work order to the Sheriffs 
Department to obtain the services of two new 8304 
Deputy Sheriff positions. The two new Deputy Sheriffs 
would alternate between providing security at the 
department's front door and using the CLETS terminal to 
access criminal justice records. 

Ms. Zimmerly advises that the department currently has 
two permanent 8204 Institutional Police Officer positions 
providing security at the department, but that such 
Institutional Police Officers are not authorized by the 
State to access criminal justice records through the • 
CLETS system. Mr. Zimmerly advises that the 
department plans to request a reclassification of' the 
existing two 8204 Institutional Police Officer positions to 
Investigator positions. 1 

Correct a Technical Error which Resulted in 
Underbudgeting ($98,856) 

Mr. Zimmerly advises that the State approved $118,000 
for Other Current Expenses, which the Department of 
Child Support Services included in its FY 2000-01 budget 
request. During budget preparation, this amount was 
inadvertently reduced by $98,856 to $19,144. The 
proposed supplemental appropriation of $98,856 for Other 
Current Expenses would correct this underbudgeting 
error and restore the originally budgeted amount of 
$118,000. As stated previously, this $118,000 for Other 
Current Expenses has already been approved by the State 
for Fiscal Year 2000-01. 



1 According to Mr. Zimmerly, the Department of Child Support Services' FY 1999-2000 budget 
included two entry-level exempt investigator positions to both serve as security guards and to 
operate the CLETS computer terminals. However, Mr. Zimmerly reports that the State law 
requiring an independent Department of Child Support Services removed the department's 
authority to directly employ Peace Officers. As a result, in the FY 2000-01 budget for the 
Department of Child Support Services, the two exempt Peace Officer positions were reclassified as 
8204 Institutional Police Officer positions. According to Mr. Zimmerly, although the State allows 
the Department of Child Support Services to hire such 8204 Institutional Peace Officers, the State 
Penal Code does not authorize these positions to operate CLETS terminals, a service needed by the 
department to access criminal justice records. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



CASES Consortium ($254,445) 

According to Mr. Zimmerly, the State selected the City's 
Computer Assisted Support Enforcement System 
(CASES), which tracks non-custodial parents required to 
pay child support, as the database system to be used by 
33 other counties in California. Mr. Zimmerly advises 
that the State has requested that the Department of 
Child Support Services act as the fiscal agent for the 
CASES Consortium to contract with a private computer 
consulting firm to install CASES in the 33 CASES 
Consortium counties. Mr. Zimmerly reports that this 
consulting firm, named Informatix, Inc. was selected 
through a competitive bidding process for a two-year 
contract with three one-year extensions. The proposed 
$254,445 for the CASES system would fund $163,020 for - 
additional services to modify the CASES system to 
produce a new financial report required by the State 
(hourly rate charged by Informatix of $110 for 1,482 
hours) and $82,280 for assistance to be provided to 
Monterey and Merced Counties ($110 hourly rate times 
748 hours). 

The supplemental appropriation would also fund $9,145 
in services already provided to Glenn County directly by 
the Department of Child Support Services ($4,875 for 
Department of Child Support Services staff to travel to 
Glenn County and $4,270 for temporary rental of 
computers). 

City Intranet Services 

In becoming an independent department, the Department 
of Child Support Services must become connected to the 
City's Intranet/Email system. According to Mr. Zimmerly, 
the State has provided a separate allocation to fund the 
costs of this connection, which is included in the proposed 
supplemental appropriation. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



File 00-2183 : The proposed ordinance would amend the 
Annual Salary Ordinance for Fiscal Year 2000-01 to 
create the following two new permanent positions in the 
Department of Child Support Services: 



No. of 

FTE 

Positions 


Class 


Title 


Stepl 

Biweekly Salary 

(Annual) 


Step 5 

Biweekly-Salary 

(Annual) 


1.0 


8160 


Assistant Chief Family 
Support Investigator 


$2,221 
($57,968) 


$2,779 
($72,532) 


1.0 


8158 


Family Support Investigator II 


$1,710 
($44,631) 


$2,130 
($55,593) 



According to Mr. Zimmerly, the proposed two new 
investigator positions would help to staff the new 
Customer Service Unit discussed above, at a total 
annualized cost of $160,256. The annualized cost of the 
Assistant Chief Family Support Investigator at Step 5 
would be $90,765, including $72,532 in Salary and 
$18,233 in Mandatory Fringe Benefits. The annualized 
cost of the Family Support Investigator II at Step 5 would 
be $69,491, including $55,593 in Salary and $13,898 in 
Mandatory Fringe Benefits. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Budget: 



A budget for the proposed supplemental appropriation of 
$839,562 is shown in the table below: 



Budget 




Customer Services Unit (See Attachment I) 




One-time Set-up Costs 


$80,000 


Operating Costs 


148,546 


Personnel 




8160 Asst. Chief Family Support Investigator (0.67 FTE, 8 months) 


48,354 


8158 Family Support Investigator II (0.67 FTE, 8 months) 


37,062 


Fringe Benefits (25 percent) 


21.354 


Subtotal Personnel 


$106,770 


Subtotal Customer Services Unit 


$335,316 


Work Order to Sheriffs Department 


144,945 


Inadvertent Underbudgeting 


98,856 


City Intranet Connection 


6,000 


CASES Consortium 




Fiscal Agent for Upgrade to Meet New Reporting Requirements 


163,020 


Assistance to Merced and Monterey Counties 


82,280 


Assistance to Glenn County 


9.145 


Subtotal CASES Consortium 


$254,445 


Total Supplemental Appropriation 


$839,562 



Comments: 



1. According to Mr. Zimmerly, the Department of Child 
Support Services plans to fill the proposed two new 
positions (Assistant Chief Family Support Investigator 
and Family Support Investigator II) for the five-month 
period from February 1, 2001 through June 30,2001. 
However, the spending plan included in Attachment I, 
provided by the Department of Child Support Services, 
budgets the two new positions for eight months 
(November through June) in FY 2000-01, rather than the 
actual five months that the department will employ the 
new employees (February through June) in FY 2001. 
Therefore, the proposed supplemental appropriation of 
$106,770 for new personnel should be reduced by $40,039 
to $66,731 to reflect the actual number of months the new 
employees will be employed in FY 2000-01. This proposed 
reduction includes a reduction of: (a) $32,031 in Salaries, 
from $85,416 to $53,385, and (b) $8,008 in Mandatory 
Fringe Benefits, from $21,354 to $13,346. A summary of 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



the recommend reductions is contained in the following 
table: 



Title 


Annual Salary 


Budgeted 

Salary 
(8 months) 


Corrected 
Budgeted 

Salary 
(5 months) 


Proposed 
Reduction 


8160 Assistant Chief Family 
Support Investigator 


$72,532 


$48,354 


$30,221 


$18,133 


8158 Family Support Investigator II 


55,593 


37,062 


23,164 


13,898 


Subtotal Salaries 


$128,124 


$85,416 


$53,385 


$32,031 


Fringe Benefits (25 percent) 




21,354 


13,346 


8,008 


Total 




$106,770 


$66,731 


$40,039 



2. Ms. Jean Mariani of the Sheriffs Department advises 
that the Sheriffs Department will train two new Deputy 
Sheriffs to fill the two positions needed at the Department 
of Child Support Services. Therefore, the proposed 
$144,945 work order to the Sheriffs Department includes 
one-time costs of $61,000 for acquiring two new Deputy 
Sheriffs, including $54,000 for training and $7,000 for the 
cost of new uniforms and radios. As stated in Attachment 
III, provided by the Sheriffs Department, the two new 
Deputy Sheriffs will not complete training until July of 
2001. For the rest of this fiscal year, the Sheriffs 
Department will staff the two positions at the 
Department of Child Support Services with two existing 
Deputy Sheriff positions, beginning in March of 2001 for 
the four-month period between March 1, 2001 and June 
30, 2001. However, the proposed work order from the 
Department of Child Support Services to the Sheriffs 
Department budgets the two positions for six months 
each. Therefore, the proposed $144,945 for the work order 
to the Sheriff Department should be reduced by $18,686 
to $126,259 to reflect the actual number of months of the 
work order. The reduced amount of $126,259 includes the 
total $120,968 shown in the budget for the four-month 
period beginning March 1, 2001, included in Attachment 
IV provided by the Sheriffs Department, which includes 
overtime costs of $2,645. The reduced amount of $126,259 
also includes an additional $5,291 in possible over time 
costs, as discussed in Attachment III, provided by the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Sheriffs Department. 2 Mr. Zimmerly advises that the 
annualized cost of the work order in FY 2001-02, less the 
one-time costs, would be $168,536. 

3. As stated previously, the Department of Child Support 
Services currently has two filled 8204 Institutional Police 
Officers providing security at the department's front door, 
which will be replaced by the two Deputy Sheriffs funded 
by the subject $144,945 work order from the Department 
of Child Support to the Sheriffs Department. According to 
the State Penal Code, the two Institutional Peace Officer 
positions are not permitted to access the California Law 
Enforcement Telecommunications System (CLETS). 
Therefore, according to Mr. Zimmerly, the department 
plans to request a reclassification of the existing two 8204 ■ 
Institutional Police Officer positions to two Investigator 
positions. The Budget Analyst notes that: (a) once the two 
Deputy Sheriffs replace the two existing 8204 
Institutional Police Officer positions the department will 
no longer need the two existing positions, and (b) the 
department has not sufficiently demonstrated its need for 
reclassifying the two existing 8204 Institutional Police 
Officer positions into two Investigator positions. Since the 
two existing 8204 Institutional Police Officer positions are 
currently filled, the Budget Analyst recommends that the 
proposed ordinance be amended to require the 
Department of Child Support Services to eliminate the 
two 8204 Institutional Police Officer positions as soon as 
each position becomes vacant. 

4. As stated previously, the proposed supplemental 
appropriation includes $9,145 for obligations incurred for 
assistance with the CASES system already provided to 
Glenn County. Therefore, the proposed ordinance should 
be amended to provide for retroactive authorization. 
According to Mr. Zimmerly, the Department of Child 
Support Services has not yet received any of the subject 
funds from the State, since the State reimburses the 



2 The Budget Analyst notes that the since the Department of Child Support Services is entirely 
funded through the State, the State should fund any overtime costs the Sheriffs Department may 
incur in order to station two Deputy Sheriffs at the Department of Child Support Services. Should 
the Sheriffs Department not need to incur additional overtime costs of $5,291, the funds would 
remain with the State since the State reimburses the Department of Child Support Services as 
expenses are claimed on a quarterly basis. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Department of Child Support Services as expenses are 
claimed on a quarterly basis. Mr. Zimmerly advises that 
the department has not incurred any obligations for any 
of the other costs under this $839,562 supplemental 
appropriation request. 

Recommendations: 1. Reduce Salaries and Mandatory Fringe Benefits 
included in the proposed supplemental appropriation (File 
00-2184) by $40,039, from $85,416 to $53,385, to reflect 
the actual number of months the proposed two new 
employees will be employed in FY 2000-01, in accordance 
with Comment No. 1. This reduction of $40,039 includes 
$32,031 for Permanent Salaries and $8,008 for Mandatory 
Fringe Benefits. 

2. Reduce the proposed work order to the Sheriffs 
Department (File 00-2184) by $18,686, from $144,945 to 
$126,259, to reflect the actual number of months the work 
order will be in place, in accordance with Comment No. 2 
above. 

3. Amend the proposed ordinance (File 00-2184) to reduce 
the funding sources for the subject appropriation by 
$58,725 to correspond with the total $58,725 in reductions 
recommended above ($40,039 budgeted for the two new 
investigator positions and $18,686 budgeted for the work 
order to the Sheriffs Department). 

4. Amend the proposed ordinance (File 00-2184) to require 
the Department of Child Support Services to eliminate 
the two existing 8204 Institutional Police Officer positions 
as each position becomes vacant, in accordance with 
Comment No. 3 above. 

5. Amend the proposed ordinance (File 00-2184) to 
provide for retroactive authorization for $9,145 in services 
already provided to Glenn County related to the CASES 
system, in accordance with Comment No. 4 above. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to the Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



6. Approve the proposed supplemental appropriation (File 
00-2184), as amended, and approve the proposed 
amendment to the Annual Salary Ordinance (File 00- 
2183). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Department of Child Support Services 

Customer Service Unit 

Fiscal Year 2000-2001 (8 mos from 110100 thru 063001) 



n.i_i_d.cument i 



PERSONNEL 

Position 

1 - 8160 Assistant Chief Family Support Investigator (Step 5) 
3-8159 Family Support Investigator III 
1 - 8158 Family Support Investigator II (Step 5} 
Subtotal Salaries 

Mandatory Fringe Benefits 
Total Personnel 



OPERATING COSTS 

Travel 

Training 

Professional Services 

Contracts 

Services 

Printing 

Advertising 

Fuel/Auto Service 

Materials and Supplies 

Subscriptions 

Telephone Usage 

Miscellaneous 

Total Operating Costs 



ONE TIME COSTS 

Complaint Resolution Tracking Data Base Development (Computer Consulting) 
Voice Recognition Unit (VRU) Hardware 
Full Size Sedan 

Computer Equipment (5-PC's and 1 -Printer) 
Total One Time Costs 



48,354 
37,062 



00100 


85,416 


01300 


21,354 




106,770 


02300 


4,394 


02300 


16,500 


02700 


2,200 


02700 


5,000 


02700 


43,059 


03500 


2,750 


03500 


2,750 


04000 


4,400 


04000 


2,200 


03500 


200 


081 ET 


61.392 


03500 


3,701 




148,546 


02700 


35,000 


06000 


5,500 


06000 


21,000 


04000 


18,500 




80,000 



Total State Allocation Spending Plan 

* Three Ombudsperson positions budgeted in regular Child Support 
Services budget must be transferred per State requirements. 



335.316 



Source: Department of Child Support Services 



kk 



Attachment II 



WILLIE L. BROWN, JR. /^5SSK^\ MILTON \i. u\ AM S 

MAYOR feloffiSSSF Isl ACTING DIRECTOR 

CITY AND COUNTY OF 
SAN FRANCISCO 



DEPARTMENT OF CHILD SUPPORT SERVICES 

617 Mission Street, San Francisco, CA 94105-3503 Tel. (415) 356-2700 




January 10, 2001 



Harvey Rose, Budget Analyst 

San Francisco Board of Supervisors 

CUSTOMER SERVICE UNIT STAFFING 

The customer service function is a requirement of the state's Ombudsman Program. The 
Ombudsman program is established for the purpose of assisting customers in resolving issues 
related to their child support cases as well as other service-related functions. 

The Department of Child Support Services Director shall appoint staff, qualified by training and 
experience to perform the duties of the office. In San Francisco, the need for several 
Ombudsman positions was identified based on caseload size. Because these three 8159, Family 
Support Investigator 111 positions were previously anticipated, they were budgeted for in the 
fiscal year 2000-2001. Upon release of the customer service initiative guidelines, the state made 
it clear that this unit was to be supervised by an individual that would report to the Director. This 
person was to have a strong background and broad experience in the child support program as 
well as an understanding of the principles of customer satisfaction and quality control. In 
addition, to be effective and gain the trust of the public, the customer service unit was designed 
to be autonomous and free from the influence of day-to-day operations. Thus, the need for a new 
81 60, Assistant Chief Investigator position to oversee the program was required to carry out the 
aforementioned, as well as provide quality control activities and report to the Director. 
The Ombudsman work directly with the public, with much of the work being field related. The 
customer service unit, however, will perform many other service-related duties such as 
maintenance of the noncustodial parent (NCP Program) employment and training services. It is 
critical to have a caseload management person assigned to the unit to give exclusive care to the 
customer service unit child support cases. Thus the request for a new 8158, Family Support 
Investigator II caseworker position. 



4S 



City and County of San Francisco 



OFFICE OF THE SHERIFF 




Attachment III 



«A Michael Hennessey 

2\ SHERIFF 

415 - 554 - 7225 



January 10, 2001 
Ref: BPM 2000-049 



TO: Emilie Neumann 

FROM: Jean Mariani 

SUBJECT: Files 00-2184 and 00-2183 



Y 



You requested additional information regarding two Sheriff's Deputies 
Included In the Department of Child Support Services supplemental 
appropriation request. 

Once this funding is approved, we would create two additional deputy 
requisitions. A new academy class begins February 5. Deputies 
enrolled in this academy will be available for service in six months. In 
the interim, the department will assign one deputy on regular salary 
and one deputy on overtime to work at the Department of Child 
Support Services. The additional overtime cost for the remainder of 
the fiscal year would be $2,645. These deputies are under the Field 
and Support Services Division, which has more flexibility in 
assignments than the other major service areas of the department, 
i.e., the jails and courts. 

However, in the worst case scenario, should the department need to 
pay overtime to both assigned deputies, Jthe incremental overtime cost 
for the four-month period (March 1 through June 30, 2001) would be 
approximately $5,291, or $1,323 per month, including related 
mandatory fringe benefits. 

Based on a March 1, 2001 start date, the estimated cost of the work- 
order is $120,968. 



ROOM 4M.OTY HALL 

1 DR. CARLTON B. GOODLETT PLACE 



SAN FRANCISCO, CA 94102 



FAX 415- 554 -7050 
TOTAL P. 02 



LC 



Attachment IV 



8304 Deputy 

Child Support Services 
Base Salary (Top Step) 

8304- Deputy 



Count Amount Percentage 



52,094 



Pay Periods 



0.0 



3-1 through e-30-2001 
8304 Deputy 



$2,146 



8.7 



Total Base Salaries 



Night Differential (1700-0700) 

Overtime 

Holiday Pay (11 days) 

POST Pay 

Annual Uniform Allowance 

Total Pay 

Retirement (City Share) 
Retirement Pick-up 
Health Service 
Health Service Pick-up 
Dental Insurance 
2000 Benefit Increase 
Medicare 

Unemployment Insurance 
Total Fringe Benefits 

Subtotal Compensation 



0.00 


hrs/week 


8.00% 


80.00 


hrs/week 


1 50.00% 





$318.03 


6.00% 





$750.00 


7.099% 
9.00% 





S83.46 







$103.86 







$39.42 




10% 


$0.00 


1.45% 
0.170% 



55.337 



55,337 



802 

94 

896 

56.233 



Initial Costs (uniform/radio) $3,500.00 

Total 

Overhead @ 10% of Salaries (&raiehir -tfrre.) 

TOTAL REQUESTED 



bb.132 | 



3.735 
59.968 



Backfill for Academy 
Uniform/Radio 

Total 2000-01 



54,000 
7,000 

120,968 



Source: Sheriff's Department 



TOTftL P. 02 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Item 7 - File 00-1251 

Department: 

Item: 



Amount: 
Source of Funds: 



Department of Public Health (DPH) 

Hearing to consider the release of $1,233,854 in reserved 
funds for the San Francisco General Hospital Department 
of Psychiatry Acute Inpatient Service. 

$1,233,854 

During the Board of Supervisors FY 2000-01 budget 
hearings, $1,233,854 of the funding for the San Francisco 
General Hospital (SFGH) Department of Psychiatry was 
reserved in two amounts: 



Description: 



Budget: 



Comments: 



• $833,854 for permanent salaries. 

• $400,000 for contractual services. 

According to Ms. Monique Zmuda of DPH, the Board of 
Supervisors appropriated $1,233,854 for the continuation 
of 24 acute inpatient psychiatric beds at SFGH. Ms. 
Zmuda states that these funds were reserved in order to 
allow the Board of Supervisors to review DPH's 
performance in (a) reducing the length of inpatient stays 
for psychiatric patients who are no longer acute, and (b) 
achieving its revenue goals. 

The subject release of reserves would fund continuation of 
SFGH's acute inpatient psychiatric services at then- 
current level by funding: 

• Portions of ongoing civil service staff members' 
salaries ($833,854). 

• The ongoing University of California, San Francisco 
contract for psychiatric physician services ($400,000). 

1. According to Ms. Zmuda, as part of its FY 2000-01 
budget development, DPH proposed to eliminate 24 of the 
92 acute inpatient psychiatric beds at SFGH. As this 
proposal was not accepted by either the Board of 
Supervisors or the Mayor, DPH formulated the following 
alternative strategy to fund the 24 beds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 
48 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



SFGH psychiatric physicians asserted they could generate 
$1,800,000 in Medi-Cal, Medicare, and private health 
insurance revenue per year from the 24 SFGH beds. This 
assumed that the psychiatric patients occupying those 
beds were sufficiently acute to be eligible for Medi-Cal, 
Medicare, and private health insurance coverage. 
However, because the total cost of operating those beds 
was estimated to be $3,000,000, DPH agreed to provide 
the balance of $1,200,000 using (a) $800,000 of mental 
health contract funding previously used to place acute 
psychiatric patients with Medicare in other hospitals, and 
(b) $400,000 of General Fund support. Under the DPH 
proposal, if the SFGH psychiatric physicians failed to 
meet their revenue target because they were unable to 
reduce the length of psychiatric inpatient stays 
(particularly if they failed to reduce the number of 
decertified days for non-acute, non-revenue generating 
stays), then DPH would have the option to close some or 
all of the 24 beds. 

DPH has supported this SFGH acute inpatient 
psychiatric services initiative by investing more resources 
into alternate levels of psychiatric care, in particular by 
creating more placement opportunities which are 
appropriate for patients diverted or discharged from acute 
care. Attachment I, provided by Ms. Zmuda, shows the 
325 new beds which are being funded by DPH in FY 2000- 
01 at a total cost of $4,839,775 for the placement of non- 
acute psychiatric patients. 

2. Ms. Zmuda states that, based on the plan to continue 
the 24 SFGH beds described in Comment No. 1 above, 
SFGH has maintained a full census of 92 acute inpatient 
psychiatric services thus far during FY 2000-01 As of 
October of 2000, the SFGH Department of Psychiatry has 
exceeded its performance objectives and financial goals. 
Attachment II, provided by DPH, shows that in October of 
2000 the Department of Psychiatry had (a) reduced its 
year-to-date average length of stay (ALOS) to 
approximately 8.7 percent less than the goal, and (b) (a) 
exceeded its year-to-date revenue goal by approximately 3 
percent. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

49 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

3. Since the SFGH Department of Psychiatry has 
exceeded its performance objectives and financial goals, 
the Budget Analyst recommends release of the $1,233,854 
in reserved funds for SFGH's acute inpatient psychiatric 
services. 

Recommendation: Approve the proposed release of reserves. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

50 



Attachment I 



New Program in FY 00-01 


Number of 

New 
Beds/Slots 


Amount 


Increase in number of Organic Disorder Patched Skilled Nursing Beds 


4 


188,342 


New LHH Med/ Psych SNF ward (funded through existing resources) 


30 




Increase to Napa Intensive Skilled Nursing Psych Beds 


4 


456,000 


Increased days at high level skilled nursing at Crestwood 


1 


40,000 


New Supportive Housing Program -Le Naine 


98 


1,048,000 


Respite hotel program for psych inpatient and PES referrals 


50 


900,000 


Respite beds at Windsor Supportive Hotel program 


16 


120.000 


New Residential Care Beds 


20 


324.766 


New Shelter Support Mental Health Program 


35 


220,000 


New residential diversion mental health program 


12 


1.052.000 


New Homeless supportive housing through AB2034 Program 


55 


490.667 




325 


4,839,775 



Source: Department of Public Health 



51 



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52 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Item 8 - File 00-2187 

Department: 

Item: 



Contract Term: 



Description: 



Department of Public Health (DPH) 

Resolution authorizing the Director of Public Health and 
the Purchaser to execute a contract between the City and 
County of San Francisco and Health Advocates, LLP to 
provide uncompensated care recovery services. 

March 1, 2001 through December 31, 2002 (approximately 
22 months). 

Uncompensated care recovery services include the 
assistance to complete Supplemental Security Income 
(SSI) and Medi-Cal eligibility applications on behalf of - 
DPH patients, and representation and legal assistance for 
patients in SSI fair hearings and appeals, for the purpose 
of collecting unpaid inpatient hospital bills for DPH 
services that are provided to indigent patients. The 
proposed resolution would authorize DPH to enter into a 
contract with Health Advocates, LLP (HA), a private 
contractor, to provide an uncompensated care recovery 
program. 

The DPH issued a Request for Proposals (RFP) in 
September of 2000, and received the following two bids in 
response to its RFP: (1) Health Advocates, LLP for 
$1,180,000 each contract year and, (2) Paralign for 
$1,090,000 each contract year. Attachment I, provided by 
Ms. Monique Zmuda from the DPH, indicates that the bid 
amounts were based on estimated annual revenue of 
$6,000,000, which has since been reduced to $5,800,000. 
Ms. Zmuda further advises in Attachment I that HA 
reduced its bid by $90,000 to $1,090,000 each contract 
year, the same amount bid by Paralign, after negotiations 
with the DPH. According to Ms. Zmuda, HA was selected 
based on the DPH's evaluation of the established criteria, 
which awards points based on recent relevant experience, 
the scope of work to be performed, the quality of past 
projects and cost. Ms. Zmuda states that the DPH also 
required the bidder to provide these services by multi- 
lingual and multi-cultural staff. Ms. Zmuda further 
states that the DPH also built in additional services into 
the scope of work, including following up on treatment 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

53 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



authorization requests, and incurring the cost of re-billing 
for services provided, once the clients have been made 
eligible for Medi-Cal. 

According to Ms. Zmuda, the DPH has contracted out 
uncompensated care recovery services since 1988 to help 
supplement in-house efforts on uncompensated care 
recovery services. Ms. Zmuda advises that San Francisco 
General Hospital (SFGH) has an internal staff of ten 
Hospital Eligibility Workers to assist SFGH patients in 
identifying financial resources to pay for inpatient 
hospitalization for which no source of funding is currently 
available. Eligibility determination, which is provided by 
DPH personnel, and authorized by the City's Department 
of Human Services, typically includes assistance in ■ 
applying for Medi-Cal or SSI, and making appropriate 
third-party claims. The contractor will handle those cases 
which the internal DPH eligibility workers have deemed 
"unreimburseable," usually involving former inpatients 
who have been discharged form SFGH. These 
uncompensated care services include identifying financial 
resources to pay for the care provided, field work on 
behalf of indigent patients, such as visits to homeless 
shelters; assistance in obtaining further medical 
treatments or evaluations, as necessary; efforts to locate 
former inpatients whose addresses are not known, and 
patient advocacy and representation in appealing denials 
of benefits to administrative agencies. 

Based on a prior year actual recovery from contracting 
this service, Ms. Zmuda advises that the DPH was paid 
approximately $5,800,000 a year, or approximately 
$483,333 a month from making indigent patients eligible 
for third-party payment. The DPH anticipates the same 
level of annual reimbursement to be made under the 
proposed contract period. 

The proposed subject contract would only pay the 
contractor a percentage of the revenues actually collected, 
on behalf of the City, according to the following schedule: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

54 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Cumulative Revenues Generated 
Each Contract Year 



Comments: 



$2 million 
$3 million 



to$l,999.999 NET 
to$2,999,999 NET 
and above NET 



Contingency Fees 
Paid to the Contractor 

20 percent 
18 percent 
16 percent 



Recommendation: 



"NET' is used to describe the actual cash received by 
SFGH as opposed to any unique program determinations 
of allowable amounts and the deduction of contractual 
allowances. In accordance with the contract provisions, 
HA would be paid a varying fee by the DPH based on the 
percentage of the revenues collected by the contractor. 

1. As indicated above, the proposed contract would 
extend for the 22-month period from March 1, 2001 
through December 31, 2002. According to Ms. Zmuda, 
DPH expects to realize approximately $10,633,333 in 
additional revenues under this 22-month contract, with 
the contractor to be paid an estimated $1,884,667, or an 
overall average of 17.72 percent of the revenue collected, 
for net estimated revenues to the City of $8,748,667 for 
the term of the 22-month contract. Attachment II, 
provided by DPH, highlights the estimated revenue and 
contingency fees associated with the subject contract 
agreement. As mentioned above, the actual contingency 
fees paid to HA will depend on the revenue realized 
during the contract period. 

2. The proposed subject resolution authorizes the 
Director of Public Health and the Purchaser to make 
amendments to the subject contract, if needed. According 
to Ms. Zmuda, this is a standard provision in all of the 
DPH's contracts, which allows the DPH to make minor 
changes, such as including an additional scope of work 
requirement or extending a contract for a few months 
while an RFP is in process, but not change the intent of 
the original contract. 

Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

55 



DEC-20-2000 14 = 18 FROM DPH-CFQ 



City and County of San Francisco 




Date: 
Memo To: 

From: 



December 20, 2000 

Harvey Rose 
Budget Analyst 

Monique Zmuda /">T, 
Chief Financial Officer 



to harueyrose Attachment I 

Department of Public Health 



Mitchell H. Katz, M.D. 
Director of Health 



Re: 



Proposed Contract with Health Advocates, LLP 



This memo is in response to questions regarding the proposed contract with Health 
Advocates LLP, to provide uncompensated care recovery reimbursement services for the 
Community Health Network of the Department of Public Health. 

The following summarizes the RFP Process: 



Date RFP Issued: 
Selection Made: 



September 29, 2000 
November 21, 2000 



Number of Bidders: 2- Both profit-making private firms 

Bid Amounts: Both firms were requested to bid on services for revenue recovery of $6 
million annually. Although the bid from Health Advocates was $90,000 higher than the 
other qualified bidder, Health Advocates had a higher score, and thus was awarded the 
contract. In contract negotiations with Health Advocates, the Department was successful 
in securing a reduction equivalent to $90,000 in the contract rate for the services. 



(415) 554-2600 



101 Grove Street 



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San Francisco, CA 94102 



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57 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Item 9 - File 00-2185 



Department: 



Item: 



Department of Public Healtb (DPH) 
Real Estate Division (RED) 

Resolution autborizing a new lease of 11,125 square feet 
at 30 Van Ness Avenue for tbe Department of Public 
Healtb. 



Location: 
Purpose of Lease: 



30 Van Ness Avenue, second floor 

To provide space for the DPH's Health Promotion and 
Prevention unit (women's health services, traffic and 
injury prevention, tobacco cessation, and HIV prevention) 
which is currently located at 101 Grove Street and 1540 
Market Street. 



Lessor: 
Lessee: 



Herbst Foundation 

The City and County of San Francisco, for use by the 
DPH. 



No. of Sq. Ft. and 
Cost Per Month: 



Annual Cost: 



11,125 square feet at a monthly rental rate of $35,229.17 
(approximately $3.17 per square foot per month). On an 
annual basis, rent would total $422,750 (approximately 
$38 per square foot per year). 

$422,750 



Utilities and 
Janitorial Service: 

Term of Lease: 



Right of Renewal: 



Provided by Lessor. 

May 1, 2001 to February 28, 2006 (four years and ten 

months) 

Two options of five years each to extend the term of the 
lease. The first option to extend would adjust the rent for 
cost of living. The second option to extend would increase 
the rent to 95 percent of the then fair market value for 
space of comparable size, age, quality, and location within 
the Civic Center area of the City. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

53 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Source of Funds: 



$70,458.34 within the existing Fiscal Year 2000-2001 
DPH budget (two months, May to June of 2000, at 
$35,229.17 rent per month). The amount of $70,458.34 
comprises (a) $12,682.50 in State grant funds, and (b) 
$57,775.84 in General Fund monies. As shown in 
Attachment I provided by the DPH, the annual cost of 
approximately $422,750 for the proposed lease of 11,125 
square feet of space at 30 Van Ness Avenue would be 
covered in the following manner: (a) $89,946 in State 
grant funds, and (b) $332,804 in General Fund monies. As 
noted in Attachment II provided by the DPH, funds for 
the proposed lease have been included in the 
Department's Fiscal Year 2001-2002 budget request. Mr. 
Charles Dunn of the Real Estate Division states that the 
proposed lease contains the standard clause (Section- 
23.22) which permits the City to terminate the lease in 
the event of non-appropriation of the necessary operating 
funds. 



Description: 



The proposed resolution would authorize a new five year 
lease of 11,125 square feet of space at 30 Van Ness 
Avenue from the Herbst Foundation. This space would 
accommodate the DPH's Health Promotion and 
Prevention unit. 



Comments: 



1. The 60 employees that staff the DPH's Health 
Promotion and Prevention unit are currently located in 
4,293 square feet at 101 Grove Street, a City-owned 
building, and 3,417 square feet at 1540 Market Street, a 
leased facility, for a total of 7,710 square feet. This lease 
at 1540 Market Street is on a month-to-month basis and 
will be terminated on May 1, 2001. Under the proposed 
lease, these 60 employees would move to 30 Van Ness 
Avenue to occupy 11,125 square feet of space. The new 
location at 30 Van Ness Avenue would provide DPH with 
approximately 185.4 square feet per employee, which is 
56.9 square feet per employee more than the current 
average space of 128.5 square feet per employee. 
According to Mr. Dunn, the average amount of space per 
City employee ranges from 175 to 225 square feet. 
Attachment II, provided by the DPH, explains why the 
DPH needs 3,415, or 44.3 percent more square feet to 
alleviate overcrowded conditions. Mr. Dunn further points 
out that this proposed lease provides for a consolidation in 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

59 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



one location of tbe DPH Healtb Promotion and Prevention 
Unit. 

3. The Lessor, the Herbst Foundation, would construct, 
at a maximum cost of $110,000 to the City, tenant 
improvements pursuant to the DPH's specifications, as 
shown in Attachment III provided by the DPH. According 
to Ms. Judith Schutzman of the DPH, the Department 
anticipates these improvements will be completed by May 
1, 2000, which is the date that DPH employees would 
move into the new office space at 30 Van Ness Avenue. 
Ms. Schutzman states that- DPH's share of these tenant 
improvement costs, estimated not to exceed $110,000, 
have already been budgeted in DPH's Fiscal Year 2000- 
2001 Operating Budget, as approved by the Board of- 
Supervisors. The landlord would pay between $400,000 
and $500,000 for these tenant improvements, for total 
estimated tenant improvement costs of $510,000 to 
$610,000. The Department would also pay for moving 
expenses at an estimated cost of $15,000, and telephone 
wiring and installation at an estimated cost of $100,000. 
Such expenses would be paid from DPH's Fiscal Year 
2000-2001 Operating Budget, according to Ms. 
Schutzman. 

4. As previously noted, under the present circumstances 
there is no additional rental cost to the City for the 101 
Grove Street space which is City-owned. The proposed 
lease provides for a monthly rent of $35,229.17 for its five 
year term commencing May 1, 2001. This proposed rent 
of $35,229.17 is $31,538.81, or approximately 855 percent 
more than the current monthly rent charged to DPH for 
the Department's lease at 1540 Market Street, which is 
$3,690.36, or $1.08 per square foot per month. However, 
as stated in the attached memorandum from Mr. Dunn 
(Attachment IV), the monthly rent charged to DPH for the 
Department's month-to-month lease at 1540 Market 
Street will increase on May 1, 2001, to between $9,397 
and $10,251, or $2.75 to $3.00 per square foot per month. 
In future years, the proposed rent of $35,229.17 at 30 Van 
Ness Avenue for 11,125 square feet would be between 
$24,978.17 and $25,832.17 more than the adjusted 
monthly rent that would be charged to DPH for the 
Department's existing lease at 1540 Market Street for 
3,417 square feet, if DPH were to remain at such 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

60 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

premises, according to Mr. Dunn. However, DPH will be 
occupying 3,415 square feet of additional leased space 
(11,125 less 7,710 total square feet for the two offices at 
101 Grove Street and 1540 Market Street.) Since the 
Department is vacating 4,293 square feet of City-owned 
space at 101 Grove Street, this will create 4,293 square 
feet of available space. 

5. Mr. Dunn reports that the proposed monthly rental 
rate of $35,229.17 represents fair market value. 

Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

61 



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62 




City and County of San Francisco 
Department of Public Health 
Population Health & Prevention 

COMMUNITY MENTAL HEALTH SERVICES 



Attachment II 
Page 1 of 2 
Judith Schutzman, MPA 
Operations Manager 

1380 Howard Street, 5th Floor 

San Francisco, CA 94103-2614 

(415)255-3405 FAX (415)252-3015 

Judy_Schutzman@dph.sf.ca. us 



MEMORANDUM 



Date: January 3, 2001 

To: Anna Weinstein 

Board of Supervisors' Budget Analyst 

From: Judy Schutzman 

Subject: File #00-2185 

30 Van Ness Lease 

The Department of Public Health proposes to relocate 60 employees of the Health 
Promotion and Prevention unit from 101 Grove Street and 1540 Market Street. At 
present, these units are housed in approximately 7,710 square feet of space; 4,293 
square feet at 101 Grove and 3,417 square feet at 1540 Market. Of the 60 Health 
Promotion staff, 48 are located at 101 Grove Street. The space at 1540 Market Street 
would be abandoned once this move is accomplished. 

In recent years, the Health Promotion unit has expanded significantly due to new 
programs promoting pedestrian and traffic safety, breast cancer awareness, tobacco 
cessation, HIV prevention and other public health concerns. As staff was added, they 
were housed wherever space could be found in 101 Grove. Several employees are 
doubled up in office space designed for one person. The 48 staff at 101 Grove have 
less than 90 square feet per person. In addition, because this unit provides health 
education services to the public, there is a significant need for public information and 
other training materials as well as meeting space for presentation of programs. 

DPH management is working with the Bureau of Architecture to prepare a plan to 
rearrange the space at 101 Grove Street once this staff moves out. Some of the 
changes contemplated include relocation of the Immunization Clinic from the 4 m floor to 
the 1 st , moving the Epidemiology unit from 25 Van Ness to relieve overcrowding there, 
and providing Birth and Death records with more space. 



63 



Attachment II 
Fage 2 of 2 



File 00-2185 30 Van Ness, page 2 



The Department proposes to pay for this space with partial funding from State revenue 
to the Tobacco Free and Wedge projects, approximately 21% of the total, and the 
balance with general fund monies. Funds for this lease have been included in the 
Department's fiscal year 2001-2002 budget request. 

Should you have additional questions, please call me at 255-3405. 



Cc: Monique Zmuda 
Barbara Garcia 
Charles Dunn, Real Estate 






64 




City and County of San Francisco 
Department of Public Health 
Population Health & Prevention 

COMMUNITY MENTAL HEALTH SERVICES 



Attachment III 
Judith Schutzman, MPA 

Operations Manager 

1380 Howard Street, 5th Floor 

San Francisco, CA 94103-2614 

(415)255-3405 FAX (415)252-3015 

Judy_Schutzman@dph.sf.ca.us 



MEMORANDUM 



Date: December 29, 2000 

To: Anna Weinstein 

Board of Supervisors' Budget Analyst 

From: Judy Schutzman 

Subject: File #00-2185 

30 Van Ness Avenue Turn-key Build-out 



The Department of Public Health staff has worked with the lessor's architect to design 
space suitable for the needs of the Health Promotion and Prevention staff. The lessor 
will construct these improvements and turn the space over to us upon substantial 
completion. The improvements include construction of offices and low-height fixed 
partitions, paint, carpeting, doors and door hardware, lighting, air conditioning, standard 
electrical wiring, ceilings, code required life safety items, ADA compliance, permits and 
fees, etc. As part of the economic deal, DPH will contribute $1 1 0,000 toward these 
costs. 

Cc: Monique Zmuda 
Barbara Garcia 
Charles Dunn, Real Estate Department 



65 



Date: 1/4/01 
Sender: Charlie Dunn 
To: Anna Weinstein 

cc: Judy Schutzman 

Priority: Normal 

Receipt requested 
Subject: DPH / 30 Van Ness 



Anna, 

As we discussed, DPH occupies space at 1540 Market St. (approx 3417 sq ft). These leases are on 
"month to month" at old rental rates ($1 .08 psf /mo). DPH wants to consolidate these functions with others 
from 1 01 Grove to better serve the public (both for these services and other services such as providing 
immunizations at 101 Grove). Thus, Real Estate has not solicited a renewal proposal from the owners of 
1 540 Market St. This notwithstanding, it is highly likely that the owner will raise the rent for these spaces 
to fair market value which I estimate to be in the mid $30' s psf per year (say approximately $2.75 - $3.00 
psf per mo.) There are a number of factors which would go into this rate - not the least of which would be. 
tenant improvements and length of lease - which make predicting an exact rate difficult. 



66 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Item 10 - File 00-2145 

Department: 

Item: 



Lessor: 



Lessee: 



Locations Being 
Leased: 



Airport 

Resolution approving a new Advertising Program Lease 
between Transportation Media, Inc. and the City and 
County of San Francisco, acting by and through its 
Airport Commission. 

City and County of San Francisco, acting by and through 
its Airport Commission 

Transportation Media, Inc., a division of Eller Media 
Company, Inc., an Illinois-based company. 



According to Mr. Bob Rhoades of the Airport, there are 
144 locations for the proposed advertising, divided into 
two categories: 

• Wall-mounted advertising spaces in the Airport's 
parking structures, transit stations, shuttle bus 
interiors, non-terminal bus shelters, the rental car 
center, and parking area connector tunnels. 

• Silent monitors in the International Terminal's 
boarding areas. Silent monitors are 27 inch high-tech 
screens. 

None of the proposed 144 advertising locations would be 
in the Airport's North Terminal, South Terminal, or 
former International Terminal. 



Revenue Generated: 



Under this proposed lease, Transportation Media, Inc. is 
required to pay the Airport a first year Minimum Annual 
Guarantee of $4,050,000 or 70 percent of gross revenues, 
whichever is greater. The proposed lease states that the 
Minimum Annual Guarantee shall be increased annually 
by the amount of the Consumer Price Index's annual 
increase (adjusted for any decrease in the annual number 
of enplanements). If further advertising sites are added 
to the lease, then the Minimum Annual Guarantee would 
be increased on a pro rata basis, as determined by the 
Airport. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

67 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Term of Lease: 



Right of Renewal: 



Description: 



Five years from the earlier of (a) the date on which any 
advertising is installed, or (b) February 1, 2001. 

Three one-year options exercisable at the Airport 
Commission's sole option. Mr. Rhoades states that there 
is no right of renewal beyond the maximum term of eight 
years and that any future lease would be subject to a 
Request for Proposal (RFP). 

According to Mr. Rhoades, the Advertising Program Lease 
represents a new source of revenue for the Airport. Mr. 
Rhoades advises that the Airport Commission has had a 
policy banning advertising inside the Airport's terminals 
since the 1980s. This policy was amended in early 2000 
when the Airport Commission decided to permit (a) 
advertising panels in certain limited areas within the 
Airport's parking structures, transit stations, shuttle bus 
interiors, non-terminal bus shelters, the rental car center, 
and parking area connector tunnels, and (b) silent 
monitors in the International Terminal's boarding areas. 
The advertisements displayed would be subject to 
approval by the Airport's Design and Review Committee 1 . 
The proposed lease prohibits advertisements which 
violate the Airport Advertising Standards Policy, 
including those which (a) advertise alcohol or tobacco 
products, (b) espouse political or religious views, (c) 
promote any illegal activity, gambling, or services in 
direct competition with the Airport's business objectives, 
or (d) contain offensive imagery or language. 
Transportation Media, Inc. would coordinate all of the 
advertisers. 



Comments: 



1. The RFP for the proposed lease was issued by the 
Airport in July of 2000 and firms were required to submit 
proposals with a Minimum Annual Guarantee of 
$2,000,000 or more. According to Mr. Patrick Quinn of 
the Airport, the Airport notified approximately 25 firms of 
an informational conference which was held on June 28, 
2000. Seven of the firms which attended were 
subsequently sent a copy of the Airport's RFP. The seven 
firms which received the RFP were Airport Consulting 



1 The Airport's Design and Review Committee consists of Mr. Michael Allen (Project Manager, 
Bureau of Design and Construction), Mr. Amur Koleini (Principal Architect, Facilities, Operations 
and Maintenance), and Mr. Robin Chiang (Architect). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

68 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Incorporated, Blazers Airport Advertising, Cartelera 
Communications, Eller Media (Transportation Media, 
Inc.), Foster Media, JC Decaux (Sky Sites Airport 
Advertising), and Lee Fisher Associates. The Airport's 
RFP was issued at the same time as the airlines 
themselves issued a similar RFP for a separate 
advertising program in the jet bridges (the moveable 
corridors which connect the terminals to the airplanes). 
Mr. Rhoades states that on October 23, 2000 the airlines 
chose Transportation Media, Inc. out of the three 
proposals which were submitted to the airlines (see 
Comment No. 2). In response to the Airport's RFP, on 
October 27, 2000 the Airport received only one proposal 
from Transportation Media, Inc. which had already been 
awarded the airlines' jet bridge advertising program - 
contract. Attachment I, provided by the Airport, explains 
why the Airport only received one bid in response to its 
RFP. The responsiveness of Transportation Media, Inc.'s 
proposal to the Airport RFP's minimum standards was 
evaluated by a five-member evaluation team comprising 
two outside consultants who are experts in design and 
advertising, one senior airline representative involved in 
advertising and promotions, an Airport official 
responsible for exhibitions, and an Airport Finance 
official. The Transportation Media, Inc. proposal included 
a Minimum Annual Guarantee to the Airport of 
$4,050,000 in the first year of the proposed lease, which is 
$2,050,000 or 102.5 percent more than the Minimum 
Annual Guarantee of $2,000,000 required under the 
Airport's RFP. 

2. According to Mr. Rhoades, the idea of a jet bridge 
advertising program was initiated by the airlines which 
own 60 domestic terminal jet bridges. The Airport 
Commission approved the concept, and extended the 
program to include the 17 jet bridges the Airport owns in 
the new International Terminal which are operated by 
the airline consortium, the San Francisco Terminal 
Equipment Company, LLC (SFOTEC). This represents a 
total of 77 jet bridges. According to a policy statement 
approved by the Airport Commission, the airlines' jet 
bridge advertising program revenues are being split 35 
percent for the airlines, 35 percent for the Airport, and 30 
percent for Transportation Media, Inc. This means that 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

69 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



tbe airlines and tbe Airport jointly receive 70 percent of 
the gross revenues and Transportation Media, Inc. 
receives 30 percent, which is comparable to the 70/30 
percent split between the Airport and Transportation 
Media, Inc. under the proposed lease. Mr. Rhoades states 
that, once the Airport Commission authorized the jet 
bridge advertising program, the airlines ran their own 
competitive bid process without any involvement from the 
Airport. The airlines received proposals from three firms: 
(a) Transportation Media, Inc., (b) Sky Sites Airport 
Advertising, an affiliate of JC Decaux, and (c) 
Inplaneview, Inc. The airlines chose Transportation 
Media, Inc. According to Mr. Quinn, the proposal 
submitted by Transportation Media, Inc. included a 
Minimum Annual Guarantee of $2,887,500 to the Airport 2 ■ 
or 35 percent of gross receipts, whichever is greater. Mr. 
Rhoades states that the Airport has already received 
revenues from the jet bridge advertising program. 
Attachment II, provided by the Airport, outlines the 
history and financial arrangements of the jet bridge 
advertising program. 

3. According to Mr. Rhoades, Transportation Media, Inc. 
is already booking advertisers to use the advertising 
space which will be available under the proposed lease. 
Since the gross advertising revenues are to be split 70 
percent for the Airport and 30 percent for Transportation 
Media, Inc., Mr. Rhoades notes that, given the proposed 
lease's Minimum Annual Guarantee requirement of 
$4,050,000, Transportation Media, Inc. must generate 
annual revenues of approximately $5,785,714 in order to 
achieve its 30 percent share 3 . 



2 Under the jet bridge advertising program, the Minimum Annual Guarantee of $2,887,500 to the 
Airport represents annual revenue for the Airport in the amount of $37,500 for each of the 77 jet 
bridges. The airlines are guaranteed an equivalent amount. Since the gross advertising revenues 
are to be split 35 percent for tbe Airport, 35 percent for the airlines, and 30 percent for 
Transportation Media, Inc., given the Minimum Annual Guarantees of $2,887,500 for each of the 
Airport and the airlines, Transportation Media, Inc. must generate total advertising revenues of 
$8,250,000 in order to achieve its 30 percent share ($2,475,000). 

3 Under the proposed advertising program lease, the amount of $4,050,000 is approximately 70 
percent of $5,785,714. Under the proposed lease, in Year 1, Transportation Media Inc. must pay a 
Minimum Annual Guarantee of $4,050,000, or 70 percent of its gross revenues, whichever amount is 
more. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

70 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



4. The Minimum Annual Guarantee of $4,050,000 in 
Year 1 represents an average of approximately $28,125 
per year for each of the 144 advertising sites. According 
to Mr. Rhoades, the actual charges made for each of those 
144 advertising spaces will be determined by rate cards 
which are set according to market values. The proposed 
lease provides for Airport verification of gross advertising 
revenues through (a) a monthly gross receipts report 
signed by the Lessee, (b) an unqualified year-end report 
certified by a certified public accountant, (c) periodic 
audits of the Lessee's gross receipts, and (d) other reports 
and submissions requested at the discretion of the Airport 
Director. 

5. The Budget Analyst questioned why the jet bridge - 
advertising program contract between the airlines and 
Transportation Media, Inc. (in contrast to the subject 
proposed lease between the Airport and Transportation 
Media, Inc.), and the resulting revenues of at least 
$2,887,500 a year for the Airport, were not subject to 
Board of Supervisors approval. Mr. Rhoades states that 
the jet bridge advertising contract is between the airlines 
and Transportation Media, Inc. and that the Airport is 
not a party to that contract. With regard to the Airport's 
ability to receive revenues from the jet bridge advertising 
program without first obtaining Board of Supervisors 
approval, Ms. Mara Rosales and Ms. Adrienne Go of the 
City Attorney's Office state that the Airport's legal 
authority to receive such revenues stems from the 
Airport's Lease and Use Agreements with the airlines, 
which were previously approved by the Board of 
Supervisors in 1981. According to Ms. Rosales and Ms. 
Go, under these Lease and Use Agreements, the Airport 
Director has the authority to consent to variations to the 
prescribed uses of the Airport space leased by the airlines. 
Therefore, Ms. Rosales and Ms. Go state that, as a 
condition to granting his consent to such advertising, the 
Airport Director required the airlines to share a 
negotiated percentage of the resulting revenues with the 
Airport. In requiring a share of the advertising revenues 
in return for allowing the airlines to advertise on the jet 
bridges, the Airport Director has acted within the scope of 
the Lease and Use Agreements previously approved by 
the Board of Supervisors. Therefore, Ms. Rosales and Ms. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

71 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Go state that the jet bridge advertising revenues of at 
least $2,887,500 to be received by the Airport directly 
from the airlines do not require separate Board of 
Supervisors approval. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

72 



JAN.04'2001 15:55 650 794 4519 



CONCESSION DEV i MGMT 



Attachment I 



SFO 



San Francisco International Airport 



MEMORANDUM 



P.O.Sox 8097 
San Francisco, CA 94128 
Tel 650.821.5000 
Fax 6S0. 821. 5005 

wvAv.flysfo.com 



AIRPORT 
COMMISSION 

CITY ANO COUNTY 
OtSAN FRANCISCO 

WIIU5 li JROWN.ffl. 



TO: 



FROM: 



Alan Gibson 
Budget Analyst /j 

Bob Rhoades 

Deputy Airport Director 

Business Division 



SUBJECT: Request for Proposal Response 



DATE: January 4, 2001 



HENRY E. 6ERMAN 
PPtSIOCNT 



LARRY MAZiOLA 
V'Cf PR($I0CNT 



MICHAEL S. 5TRONSKY 



LINDA S.CRAYTON 



JOHN L.MARTIN 
AIRPORT OIBCCTOn 



This is in response to your email dated January 3, 2001 , regarding "further information 
request". This memorandum is addressing question no. 2, pertaining to Transportation 
Media, Inc., being the sole response to the Airport Advertising Request for Proposal. 

On June 28, 2000, the Airport conducted a pre-proposal conference for the Airport 
Advertising Program. Through Concession Development and Management's outreach, 
twenty- five companies were identified through a national search and were issued the pre- 
proposa] document. 

Seven advertising companies responded and attended the pre-proposal informational 
conference (a list of the companies have been emailed to you). Transportation Media, 
Inc. was the only company to respond and to participate in the proposal process of the 
Airport Advertising Program. 

Separately, Transportation Media, Inc. and JCDecaux/SkySites participated m a separate 
request for proposal issued and awarded (on behalf of the airlines) the loading bridge 
advertising program. Transportation Media, Inc., being the successful proposer, was 
awarded with this operating agreement. 



cc: Patrick Quinn 

Concession Development and Management 



73 



JAN.04'2001 15:55 650 794 4519 



CONCESSION DEV I HGMT 



Attachment 




San Francisco International Airport 



MEMORANDUM 



P.O. Box 6097 

S*n Francisco. CA 94128 

Tel 650.821. SOOO 

Fax 650.821.5005 

www.flyjfo.com 



DATE: January 4, 2001 



Amronr 

COMMISSION 
CITY ANO COUNTY 
OF SAN FRANCISCO 

WILL if L.BROWN. JR. 
MAYOR 

henry j. hum 

LARKY MAZZOLA 
Vice PRCSIDENT 

MICHAtl 5. 5THUNJltr 

LINQA S.CHAYTON 



JOHN L MARTIN 

aikcoht omecTOK 



TO: Alan Gibson 

Budget Analyst 

FROM: Bob Rhoades 

Deputy Airport Director 
Business Division 



SUBJECT: Loading Bridges 

In response to your email dated January 3, 2001, regarding "further information request", 
this memorandum is addressing question no.3, pertaining to the legal authority the 
airlines control the loading bridge advertising space and revenues. 

In February 2000, the Airport amended its long standing position on commercial 
advertising in certain non-terminal areas. One of the areas the airport expanded included 
the airline-owned loading bridges in the domestic terminals. In order to allow the airlines 
to commercially advertise in their loading bridges, the airport made an agreement with 
the airlines that all revenues would be split in half between the Airport and the airlines. 
In return, the Airport provided the airlines the same opportunity with the loading bridges 
in the international terminal, which the Airport owns. 

AvAirPros conducted a Request for Proposal (RFP) for the loading bridges on behalf of 
the airlines to facilitate the RFP process. The contract had three proposers: 
Transportation Media, Inc., A Division of Eller Media; JCDecaux - SkySites; and 
InPlaneView. Transportation Media, Inc. was awarded the contract based on their 
proposal. 



74 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Item 11 - File 00-1252 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Port of San Francisco 

Hearing to consider the release of reserved funds in the amount 
of $460,000 for fire protection improvements at Pier 50, 
including construction of a 12 inch ductile iron water main at 
Pier 50, for use as part of the $1,101,000 Piers 48 and 50 Fire 
Protection Project. 

$460,000 

San Francisco Harbor Operating Fund 

In November of 1996, (File 101-96-19) the Board of Supervisors 
placed $1,329,000 on reserve for capital improvement projects 
pending the Port's selection of contractors and the submission of 
budget details. On four occasions since that time, the Board of 
Supervisors has released portions of the reserved funds for 
various projects, as indicated below: 



Description 


Date 


Amount 


Funds Initially Placed on Reserve 


Nov. 1996 


$1,329,000 




Date 


Amount 


Reserved Funds Released 


Released 


Released 


-Pier 1 l A, Emergency Wall Repairs 


May 1998 


$137,960 


-Pier 47-A, Design Services for 






Reconstruction of Pier 


May 1998 


39,622 


-Agricultural Building Design Work 


May 1998 


26,000 


-Agricultural Building East Entry 






Stair Replacement 


May 2000 


202,900 


Total Amount Released 




406.482 



Remaining Reserved Funds 



$922,518 



According to Ms. Imani Haygood of the Port, $460,000 of these 
funds were originally allocated in the Port's FY 1996-1997 
Capital Projects budget for construction of fire walls at Pier 50, 
Shed A to improve fire protection at the Port. After reviewing 
the project, however, the Fire Marshall approved a sprinkler 
system as the best method of fire protection at Pier 50. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

75 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Tbe proposed release of reserved funds would release $460,000 
of the remaining $922,518 in reserved funds to contribute a 
portion of the total of $1,101,000 in total funds required to 
design and construct a sprinkler system, as well as other 
improvements at Pier 50. Specifically, components of the project 
would include (a) replacement of the current eight inch water 
main with a 12 inch ductile iron water main 1 , (b) installation of 
a new fire sprinkler system for Pier 50, Shed A, (c) installation 
of new alarms and fire controls for Pier 50, Sheds A and D, (d) 
consultation by the San Francisco Water Department (see 
Comment No. 2), and (e) design consultation for construction. 
The proposed release of $460,000 in reserved funds plus 
$394,000 in existing capital appropriations plus $247,000 in 
funds received from a fire insurance settlement would fund the 
total project cost of $1,101,000. 

The subject release of reserved funds would leave a total of 
$462,518 remaining on reserve ($922,518 in currently reserved 
funds less $460,000 in funds requested). 

Budget: A summary project budget and list of project funding sources is 

as follows: 

Project Budget 
Construction: 

New 12 inch ductile iron water main $588,300 

New fire sprinklers, alarms, and 

controls for Pier 50, Shed A 249,600 

New alarms and controls for Pier 50, 

Shed D 16.730 

Total base construction $854,630 

10% contingency 85.463 

Total Construction $940,093 

SFWD Fire Main Services (actual cost) 143,000 

Design Services (actual cost) 17.907 

Total Project Budget $1,101,000 



1 Ductile cast iron is a form of cast iron that is less likely to succumb to cracking or corrosion than 
older forms of iron. It represents an improvement over the material of which the current eight inch 
water main is composed. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

76 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Project Funding 

Proposed Release of Reserved Funds $460,000 

FY 1999-2000 Port Capital Budget 394,000 

Pier 48 Fire Insurance Settlement 247,000 

Total Project Funding $1,101,000 

Comments: 1. According to Ms. Haygood, the proposed. project is anticipated 

to commence on or around February 1, 2001, and is expected to 
be completed by April 30, 2001. 

2. Ms. Haygood states that the $143,000 budgeted for the San 
Francisco Water Department represents payment for 
engineering review and approval of proposed fire suppression 
improvements, some materials for integrating the proposed 12 
inch water main into the City's water infrastructure, and other 
miscellaneous engineering fees. According to Ms. Haygood, the 
$17,907 the Department expended for design services was for 
design work conducted by the Utilities Engineers Bureau of the 
Public Utilities Commission (PUC). According to Ms. Haygood, 
the services provided by the Water Department and the Utilities 
Engineers Bureau were completed in March of 2000. These 
services were funded from FY 1999-2000 Port Capital Budget 
funds previously appropriated and allocated for the subject 
$1,101,000 project, according to Ms. Haygood. 

3. According to Ms. Haygood, on September 14, 2000, the Port 
issued an Invitation for Bids to construct fire protection 
improvements as part of the Piers 48 and 50 Fire Protection 
Project. A Request For Proposal (RFP) was sent to the list of 
approved Human Rights Commission (HRC) contractors, 
minority newspapers, trade journals and construction-related 
publications. The subcontracting goals for this project were 17 
percent MBE participation and six percent WBE participation. 
On October 31, 2000 the Port received four bids. The Port 
engineering staff and the HRC reviewed the submitted bids, and 
selected D'Arcy and Harty, Inc., who bid $854,630 as the lowest, 
responsive bidder meeting the Project subcontracting goals. The 
following table lists the contractors that responded to the Port's 
RFP, and their respective bids: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

77 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Contractor 


Quote 


Bidding 
Discounl 


Net Final 

Bid 


D'Arcy & Harty 
Construction, Inc. 


$854,630 


5% LBE 


$811,899 


Proven Management, Inc. 


931,250 


10% MBE 


838,125 


Alpha Bay Builders, Inc. 


947,819 


10% MBE 


853,037 


A.Y. Seto Corporation 


1,864,000 


10% MBE 


1,677,600 



Recommendation: 



The Attachment, provided by the Port, is the bid summary 
document for the construction contract amount of $854,630. 

4. According to Ms. Haygood, the water main that currently 
supplies Sheds A and D at Pier 50 is eight inches in diameter, 
and has suffered some corrosion since it was initially installed in 
1926. Further, Ms. Haygood reports that the current eight inch 
main is not large enough to supply Pier 50 the volume of water 
necessary for proper operation of the proposed sprinkler system. 
The proposed release of reserved funds would allow the Port, 
along with other improvements, to replace the eight inch main 
with a 12 inch ductile iron water main, which would have the 
capacity to supply an adequate volume of water to the proposed 
sprinkler system at Pier 50, Shed A. Ms. Haygood notes that, in 
addition to providing additional fire protection to the Port, the 
new water main would also supply irrigation water to the new 
China Basin Shoreline Park, which is currently under 
construction. Ms. Haygood states that the new irrigation system 
would consist of sprinklers and other systems to supply grass 
and trees located at the park with adequate supplies of water. 

Approve the requested release of reserved funds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

78 



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Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Item 12 - File 00-2163 

Department: 

Item: 



Services to be 
Performed: 



Description: 



District Attorney 

Resolution concurring witb the Controller's certification 
that assistance to certain victims of crime and education 
in community anti-street violence can continue to be 
practically performed for the District Attorney's Victim 
Witness Assistance Program by a private contractor for a 
lower cost than similar work services performed by City 
employees. 

Victim Witness Services for the District Attorney's Victim 
Witness Assistance Program 

Victim Witness Services for the District Attorney's Victim 
Witness Assistance Program consist of helping lesbian, 
gay, bisexual, and transgender victims and witnesses to 
cooperate with the criminal justice system in 
prosecutions. 

Charter Section 10.104 provides that the City may 
contract with private firms for services that can be 
practically performed for a lower cost than similar work 
performed by City employees. 

The Controller has determined that contracting with 
Victim Witness Services for FY 2000-2001 would result in 
estimated savings as follows: 



City-Operated Service Costs 
Salaries 
Fringe Benefits 
Total 

Contractual Services Cost 

Estimated Savings 



Lowest 
Salary 
Step 
$137,656 
37.485 



Highest 
Salary 

Step 
$163,176 
41.497 



$175,141 $204,673 

(113.175) (114.488) 

$61,966 $90,185 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

80 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Comments: 



1. A contract for Victim Witness Services was first 
certified under Proposition J as required by Charter 
Section 10.104 in 1981 and such services have been 
provided by an outside contractor, Community United 
Against Violence (CUAV), a non-profit corporation, since 
that time. Ms. Linda Alexander of the District Attorney's 
Office advises that Victim Witness Services are provided 
on a sole-source basis by CUAV. According to Ms. 
Alexander, since 1981 CUAV has been the sole provider of 
(a) assistance to lesbian, gay, bisexual, and transgender 
victims of crime and (b) hate-crime prevention services, 
and is therefore uniquely qualified to provide such 
services. 



2. The Contractual Services Cost used for the purpose of " 
the analysis is based on (a) CUAVs estimated FY 2000- 
2001 costs to provide victim witness services, and (b) the 
salary and fringe benefits of 0.1 FTE 8131 Victim Witness 
Investigator II position in the District Attorney's Office to 
monitor the contract. 

3. The one-year contract with CUAV for FY 2000-2001 
commenced on July 1, 2000. Therefore, the proposed 
resolution should be amended to provide for retroactivity. 
According to Ms. Alexander, delays in processing the 
contract resulted in a delay in bringing the proposed 
resolution to the Board of Supervisors. The Budget 
Analyst notes that the District Attorney's office has 
submitted the above contract, after that contract has 
begun, each of the last three years. The budget analyst 
further notes that the Department has provided the same 
explanation of this for action each of the last three years. 



Recommendation: 



4. The Attachment to this report, provided by the District 
Attorney's Office, is the Controller's supplemental 
questionnaire, with the responses from the District 
Attorney's Office. 

Amend the proposed resolution to provide for retroactivity 
and approve the proposed resolution as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

81 



t\ ,_ <_d.V_il.lii. L 



CHARTER 10.104.15 (PROPOSITION J) QUESTIONNAIRE 

DEPARTMENT: District Attorney'?; Office 

CONTRACT SERVICES: Community United Against Violence_ 
CONTRACT PERIOD: July 1 . 9000 thru June 30. 2001 

(1) Who performed the activity/service prior to contracting out? 
No one performed these services prior to CUAV. 

(2) How many City employees were laid off as a result of contracting out? 

There have not been and will not be any City employees laid off as a result of the 
contract. 

(3) Explain the disposition of employees if they were not laid off. 
N/A 

(4) What percentage of City employees' time !s spent of services to be contracted out? 
N/A 

(5) How long have the services been contracted out? Is this likely to be a one-time or an ongoing 
reque.it for contracting out? 

The services have been contracted out since 1983. This is an on-going contract with 
annual requests. 

(6) What '.ras the first fiscal year for a Proposition J certification? Has it been certified for each 
subsequent year? 

The contract precedes Proposition J. The Contract has been certified each year since 
Proposition J passed. 

(7) How will the services meet the goals of your MBE/WBE Action Plan? 

CUAV is a 501 ©3 non-profit. I do not believe it falls under MBEAA/BE categories (as it 
is not "owned"). 50% of the Board are people of color. 

(8) Does lhe proposed contract require that the contractor provide health insurance for its employees? 
Even If not required, are health benefits provided? 

CUAV provides health insurance for it's employees. 

(9) Does lhe proposed contractor provide benefits to employees with spouses? If so, are the same 
benefits provided to employees with domestic partners? If not, how does the proposed contractor 
compi/ with the Domestic Partners ordinance? 

The contractor complies with the Domestic Partnership ordinance, providing benefits to 
both spouses and domestic partners. 

Department Representative: Linda Alexander 
Telephone Number (41.^ 553-9044 



82 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Item 13 - File 00-2186 



Department: 



Item: 



Department of Telecommunications and 
Information Services (DTIS) 

Department of Administrative Services, Real 
Estate Division (RED) 

Resolution authorizing exercise of option regarding 
an extension an existing lease at One Market 
Plaza, on behalf of the Department of 
Telecommunications and Information Services. 



Location: 

Lessor: 

Lessee: 

Purpose of Lease: 



One Market Plaza 

EOP-One Market, L.L.C., a Delaware Corporation 

City and County of San Francisco, DTIS 

Space for the operation of the primary data center 
for networked computer and telecommunications 
systems used by the City and County of San 
Francisco. 



No. of Square Feet 
and Cost Per Month 
Payable by the City 
to EOP-One Market: 



Term of Original 
Lease: 

Term of Proposed 
Extension: 



Right of Renewal: 

Utilities and Janitor 
Services: 



19,051 square feet at approximately $127,007 per 
month (approximately $6.67 per square foot per 
month) or approximately $1,524,080 annually. The 
rent would be adjusted annually for any increases 
in operating and/or Property Tax costs, not to 
exceed five percent over any previous year. 

May 12, 1993 through January 31, 2001, with two 
five-year options to extend. 

February 1, 2001 through January 31, 2006 (the 
first of two five-year options to extend). 

One additional five-year term, from February 1, 
2006 through January 31, 2011. 

Landlord pays standard building services and 
utilities, with the exception of special 
environmental services necessary for data center 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

83 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Description: 



Comments: 



operations (such as high volume air conditioning 
and power requirements) 1 . 

In 1993, the Board of Supervisors authorized the 
Director of Property to enter into a lease that 
allowed the relocation of the DTIS City data center 
from the basement of City Hall to One Market 
Plaza (File No. 64-93-5). The proposed resolution 
would authorize the Department to exercise the 
first of two five-year options, extending the current 
lease from February 1, 2001 through January 31, 
2006. Unless extended, the current lease will 
expire on January 31, 2001. 

1. According to Mr. Steve Legnitto of RED, under 
the terms of the original lease, the City assumed 
occupancy of One Market Plaza for an initial period 
of approximately 7 years and 8V2 months at the 
rate of $15.50 per square foot, annually, or 
approximately $1.29 monthly. Under the terms of 
this lease, the City is allowed two options to extend 
for five years each, with the rent to be adjusted for 
each five-year extension period to a mutually 
agreed upon fair market rate, according to Mr. 
Legnitto. 

2. According to Mr. Legnitto, the proposed lease 
rate of $6.67 per square foot per month, or $80 per 
square foot annually, which is an increase of 
approximately 416 percent, represents fair market 
value. According to Mr. Legnitto, DRE initially 
rejected the proposed rate of $80 per square foot 
annually as too high. After an extensive review of 
available market data, however, DRE determined 
that the landlord's estimate of market value was 
considered to be the fair market value, according to 
Mr. Legnitto. Mr. Legnitto notes that subsequent 
to settling on the rate of $80 per square foot 
annually for the proposed lease extension, two 
other tenants entered into leases at One Market 



' According to Mr. Steve Legnitto of RED, electricity, gas and water costs are split between the landlord 
and the City according to a formula that determines a standard level of use for office space. The landlord 
pays for "normal office use" of those utilities, and the City pays for use that is in excess of this standard 
level of use for office space. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

84 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Plaza at the rates of $90 and $115 per square foot 
annually. 

3. Under the original lease agreement, the City is 
currently paying $15.50 per square foot annually 
(approximately $1.29 per square foot per month) for 
a total annual rent of $295,290. The proposed lease 
rate would therefore represent an increase of 
$64.50 per square foot annually ($80 less the 
current rate of $15.50), or a total increase of 
$1,228,790 annually ($1,524,080 less the current 
annual rate of $295,290) or an approximate 416 
percent increase over the current lease rate. Mr. 
Legnitto explains, however, that DTIS initially 
took occupancy of the space under extremely 
favorable circumstances. According to Mr. 

Legnitto, the prior tenant of One Market Plaza, 
The Del Monte Corporation, had used the subject 
space as a data center. Consequently, many 
existing infrastructure improvements to the space 
that are particular to data center operations were 
already in place. Additionally, Mr. Legnitto notes 
that Del Monte was in the process of downsizing its 
operations, and, for purposes of expediency, 
arranged for DTIS to assume occupancy of the 
property for approximately half the market rate at 
that time, according to Mr. Legnitto 2 . While the 
current rent paid by the City for One Market Plaza 
under the original lease is $15.50 per square foot, 
annually, Mr. Legnitto estimates the fair market 
value of One Market Plaza in 1993 was roughly $30 
per square foot, annually. 

According to Mr. Legnitto, the large increase in 
rent is a result of a) the City having paid 
significantly below the market rate in the original 
lease and b) significant rent increases in the 
commercial real estate market since 1993. 

4. According to Mr. Legnitto, the option of 
relocating the data center to less expensive space 
would not be practical unless and until City-owned 



2 Subsequent to the City entering into the lease for One Market Plaza, the property was sold, along with the 
City's lease, to EOP-One Market, LLP, who is the current landlord. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

85 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

space becomes available. Mr. Legnitto states that 
the eventual relocation of the DTIS data center will 
be extremely costly because a) new space must be 
improved to meet specific requirements of data 
center operations, which includes addition of 
special air conditioning and electrical systems 
infrastructure 3 , and b) the DTIS data center 
operates 24 hours a day, and the move would 
require temporary duplication of many information 
systems so as not to interrupt or damage those 
systems. Thus, according to Mr. Legnitto, because 
the transaction costs associated with relocation of 
the data center are very high, RED and DTIS 
would prefer to wait until City-owned space, such 
as the new City construction at 525 Golden Gate 
Avenue, is available to ensure that the next 
relocation of the data center will be permanent. 

5. According to Mr. Legnitto, under the terms of 
the current lease the City would have the right to 
sublet the current space at One Market Plaza if the 
City relocated the DTIS data center prior to 
completion of the proposed five-year extension. Mr. 
Legnitto notes that the agreement also contains the 
standard City contract provision which permits the 
City to terminate the lease in the event of non- 
appropriation of the necessary operating funds. 

6. According to Ms. Kathryn Hile of DTIS, the 
funds DTIS receives from City Departments for 
computer and telecommunications services 
rendered are from both General Fund supported 
and non-General Fund supported departments. In 
the aggregate, these reimbursements to DTIS from 
City departments are made up of approximately 16 
percent non-General Fund monies and 84 percent 
General Fund monies, according to Ms. Hile. Thus, 
Ms. Hile estimates that 84 percent of the cost of the 



3 Neither DTIS nor RED currently have current estimates as to the expected cost of making necessary 
improvements to any new space for DTIS. However, the City and previous landlord made approximately 
$1,630,965 in improvements to One Market Plaza pnor to the City taking occupancy of the site in 1993. 
These additional improvements were needed despite the fact that extensive data center infrastructure 
already existed at the site. Further, Mr. Cuni Takeshita of DTIS states that the Department made a rough 
estimate in 1998, and determined that the cost of building infrastructure in a new space and acquiring 
equipment necessary for moving the data center would be in excess of 510,000,000. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
86 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



proposed $1,228,790 increase in annual rent, or 
approximately $1,032,183 of tbat increase, will 
represent increased General Fund expenditures. 

7. According to Ms. Hile, DTIS anticipated an 
increase in rent wben formulating its FY 2000- 
2001 budget, and included in its budget funds 
sufficient to meet the increased cost of the proposed 
lease for the last 5 months of the 2000-2001 fiscal 
year, effective February 1, 2001. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

87 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Item 14 -File 00-2217 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Police (SFPD) 

Hearing to consider the release of reserved funds for the 
Police Department in the amount of $4,297,098 to fund 
overtime expenditures. 

$4,297,098 

Police Department FY 2000-2001 General Fund Budget 

The SFPD's FY 2000-2001 General Fund budget includes 

budgeted overtime expenditures of $12,842,315. The 
Finance and Labor Committee placed a total of $4,297,098 
of this amount on reserve, leaving $8,542,217 available 
for expenditure. 

The table below provides a summary of overtime spending 
to date and projected spending for FY 2000-2001, as well 
as spending to date and projections for all Police 
Department General Fund Salary and Fringe Benefit 
accounts based on the Controller's payroll records. 



Controller's Projection - Police Department General Fund Expenditures for 
Overtime and total Salaries and Fringe Benefits based on Expenditures 

through December 8, 2000 

Actual 
Expenditures Projected 

Through Pay Expenditures Projected Surplus 

FY 2000-2001 Period Ending Through July 30, (Deficit) 

Budget 12/08/2000 2001 * 



Overtime 

All Salaries and Fringe 
Benefits Including 
Overtime 



$12,842,315 $7,658,749 $16,587,343 $(3,745,028) 

196,392,203 86,948,008 195,747,064 645,139 



Projection based on spending at the level of the pay period ending 
12/08/2000 for the remainder of the Fiscal Year. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

88 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



As summarized in the table above, the Controller's latest 
projection report for salary and fringe benefit expenditures 
(including overtime) shows that: 

• As of the pay period ending December 8, 2000, the SFPD has 
incurred General Fund overtime expenditures of $7,658,749. 

• Through December 8, 2000 (or 11.5 of 26.0 pay periods in FY 
2000-01) the SFPD has already expended 59.6 percent of its 
total overtime appropriation of $12,842,315, and 89.6 percent 
of its available, unreserved overtime funding of $8,542,217. 

• Based on overtime expenditures incurred during the pay 
period ending December 8, 2000, the Controller's projection 
indicates that the SFPD will spend a total of $16,587,343 on 
overtime which is 29.2 percent or $3,745,028 more than the 
Department's total FY 2000-2001 overtime appropriation of 
$12,842,315. 

• For all Salaries and Fringe Benefit Expenditures, including 
Overtime, the Controller's projection indicates that the SFPD 
will incur total expenditures of $195,747,064 in FY 2000- 
2001, which is $645,139 or 0.33 percent less than the FY 
2000-2001 budget amount of $196,392,203. 

• The SFPD spending plan currently projects deficit spending 
for overtime of $3,788,277, which is $43,249 more than the 
Controller's projection. However, for all Salaries and Fringe 
Benefits (including overtime) the SFPD projects a surplus of 
only approximately $93,480 which is $551,659 less than the 
Controller's latest projected salary and fringe benefit surplus 
of $645,139 (See Comment 1 below). 

Based on a projected salary and fringe benefit surplus of 
$93,480, it is unlikely that the SFPD will require a 
supplemental appropriation in FY 2000-2001 assuming the 
Board of Supervisors releases a separate reserve of $1,700,195 
for uniform salaries (see Comment 2 below). 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

89 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



Comments: 1. The SFPD's projected FY 2000-2001 surplus of $93,480 is 

comprised of the following elements: 

Projected Surplus 
Expenditure Object (Deficit) 

Miscellaneous Salaries $ 202,042 

Uniform Salaries 2,567,041 

Temporary Salaries (118,264) 

Premium Pay (327,154) 

Overtime (3,788,277) 

Holiday Pay 161,712 

Fringe Benefits 1.396.380 
Total FY 2000-2001 Deficit $ 93,480 

2. During the Finance and Labor Committee's hearings on 
the proposed FY 2000-2001 budget in June of 2000, the Finance 
and Labor Committee reserved an additional $1,700,195 
"pending a plan for the hiring and training of additional Police 
Officers to bring the Department's staffing up to 1,971 Police 
Officers as required by Charter Section 4.127". The SFPD's FY 
2000-01 budget proposed hiring 200 new Police Officers. 

3. The SFPD began FY 2000-2001 with 2,077 Police Officers 
(excluding the Airport Police). Since that time, the Department's 
sworn staffing has changed as shown in the table below: 

Changes to Police Sworn Staffing Since July 1, 2000 
(Excluding Airport Police) 

Sworn Staffing on July 1, 2000 2,077 

New Hires 

Academy Class Started 9/18/2000 44 

Attrition : 

Service or Disability Retirement (37) 

Resignations (18) 

Recruits discharged from Academy (7) 

Deaths (2) 

Sworn Staffing as of January 8, 2001 2,057 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

90 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



In addition to the current sworn staffing of 2,057, the SFPD 
hired 46 new recruits who began the Police Academy on January 
8, 2001. 

4. The SFPD's hiring schedule, presented to the Finance and 
Labor Committee during the June of 2000 budget hearings, 
projected that 200 new Police Officers would be hired during FY 
2000-2001 as shown below: 

FY 2000-2001 Police Hiring Plan Presented to Finance 
and Labor Committee in June of 2000 

Number of Police Officers 
Date Scheduled for Hire 

9/1/2000 40 new recruits 

10/28/2000 20 lateral transfers 

11/25/2000 40 new recruits 

3/03/2001 40 new recruits 

3/31/2001 20 lateral transfers 

06/09/2001 40 new recruits 

Total 200 new hires 

As noted above, to date, the SFPD has actually hired a new 
recruit class of 44 (on September 18, 2000) and a second new 
recruit class of 46 (on January 8, 2001) for a total of 90 new 
hires during FY 2000-2001. Of the new recruit class of 44 hired 
on September 18, 2000, seven were released from the Police 
Academy during their initial training period. 

The original hiring plan has been revised by the SFPD since it 
was presented to the Finance and Labor Committee in June of 

2000. During the remainder of the current fiscal year, the SFPD 
hiring projection calls for the hiring of 115 additional Police 
Officers, including 25 lateral transfers in March of 2001; 45 new 
recruits in April of 2001 and 45 new recruits in late June of 

2001. If this hiring schedule is met, the SFPD will have hired a 
total of 205 (90 plus 115) new Police Officers during FY 2000- 
2001 or 5 more than originally anticipated. As noted above, 
seven of the 44 new recruits were released from the Academy 
class that began September 18, 2000, and it would be expected 
that some of the new hires during the remainder of this Fiscal 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

91 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

Year would likewise not complete tbeir initial training for a 
variety of reasons. 

The current, revised SFPD Hiring Plan is summarized in the 
table on the following page. 



FY 2000-2001 Revised Police Actual Hires and Hiring 
Plan as of January 8, 2001 

Number of Police Officers 
Date Scheduled for Hire 

Hired 

9/18/2000 44 new recruits 

1/08/2001 46 new recruits 

Planned Hires 

March of 2001 25 lateral transfers 

April of 2001 45 new recruits 

June of 2001 45 new recruits 

Total 205 



5. According to Captain John Goldberg, Commanding Officer 
of the SFPD Fiscal Division, the SFPD is currently preparing a 
potential request for the expenditure of approximately $800,000 
in order to strengthen the SFPD's recruitment and hiring efforts 
using the Finance and Labor Committee's reserve of $1,700,195 
discussed in Comment 2, above as a source of funds. However, 
as noted previously in this report, the SFPD's spending plan 
currently results in a projected yearend surplus of only $93,480 
assuming that the reserve of $1.700,195 is released bv the 
Finance and Labor Committee . Therefore, a request for new 
funding of an estimated $800,000 for recruitment and hiring 
would require a supplemental appropriation unless additional 
funds can be identified within the SFPD's existing budget. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

92 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



6. The Budget Analyst has reviewed the SFPD's FY 2000- 
2001 spending plan which, as noted previously, results in a 
projected salary and fringe benefit surplus of $93,480, and 
therefore the SFPD will not require a supplemental 
appropriation in FY 2000-2001. This assumes that the Board of 
Supervisors releases the previously noted reserve of $1,700,195 
for uniform salaries. However, in reviewing the Department's 
spending plan, the Budget Analyst has found that the SFPD has 
not accounted for and included all of the General Fund resources 
currently approved in the Department's FY 2000-2001 budget. 
Specifically, the spending plan estimates yearend total 
expenditures based on year to date total General Fund spending 
on salaries (including overtime) and fringe benefits, through the 
pay period ending December 8, 2000. However, the SFPD budget 
includes a General Fund Annual Project appropriation for the 
SFPD's Accelerated Hiring Project which has budgeted General 
Fund salary and benefit expenditures of $582,000. If these 
additional resources, which have not been accounted for in the 
SFPD's FY 2000-2001 spending plan, are incorporated in the 
SFPD's spending plan, the yearend projected surplus of $93,480 
increases to $675,480 ($93,480 plus the additional budget 
resources of $582,000). According to Captain Goldberg, the 
SFPD spending plan will be corrected to include the General 
Fund project resources contained in the SFPD budget. 

7. During the review of the proposed FY 2000-2001 SFPD 
budget in June of 2000, the Budget Analyst reported to the 
Board of Supervisors that the Police Department's recommended 
appropriation for overtime expenditures appeared to be 
underbudgeted by $2,250,000 compared to projections of FY 
1999-2000 police overtime projections available at that time. In 
fact, the SFPD is now estimating that their overtime has been 
underbudgeted by $3,788,277. Also, the Budget Analyst 
recommended reductions to the SFPD proposed FY 2000-2001 
budget of $1,645,025, which included reductions of $1,338,525 
for Uniform Salaries and related Fringe Benefits. At that time, 
the Budget Analyst noted that the reductions of $1,333,525 to 
the SFPD proposed budget for Uniform Salaries and related 
Fringe Benefits would not impair the SFPD's ability to fund its 
planned hiring of 200 new Police Officers during FY 2000-2001. 
As noted in Comment 1 of this report, the SFPD's current 
spending plan projections show an anticipated surplus of 
$2,567,041 for Uniform Salaries and $1,396,380 for related 
Fringe Benefits, or a total surplus of $3,963,421. This surplus is 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

93 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 

projected even after accounting for tbe SFPD plan to complete 
the scheduled hiring of 205 new Police Officers during the Fiscal 
Year. 

The Police Department disagreed with the Budget Analyst's 
recommendation which was not accepted by the Finance and 
Labor Committee. By allowing the Police Department to 
maintain the $1,338,545 in its budget, the Police Department 
was able to spend more money on overtime which is presently 
anticipated to exceed the Police Department's budgeted overtime 
by $3,788,277, as previously noted. 

Summary: The Finance and Labor Committee has reserved a total of 

$4,297,098 out of the SFPD's total overtime appropriation of 
$12,842,315. The SFPD is now requesting a release of that 
reserve. Based on the rate of spending on Police overtime 
between July 1, 2000 and December 8, 2000, the Controller's 
most recent data result in a yearend deficit projection of 
$3,745,028 in overtime, and a yearend surplus of $645,139 for 
all General Fund Salaries and Fringe Benefits including 
overtime. 

The SFPD's internal spending plan projections estimate that by 
the end of FY 2000-2001, the overtime deficit will be $3,788,277. 
Overall, the SFPD spending plan, once corrected to account for 
General Fund resources budgeted for the Accelerated Hiring 
Project, will result in an overall projected salary and benefit 
surplus of $675,480. Therefore, a supplemental appropriation 
will not be required for the SFPD assuming a separate reserve 
of $1,700,195 is released by the Finance and Labor Committee. 
However, if the SFPD requests additional estimated funding of 
$800,000 for recruitment and hiring, a projected supplemental 
appropriation would be required based on the current projected 
surplus of $675,480. 

The SFPD's original budget for FY 2000-2001 called for the 
hiring of 200 new Police Officers during the fiscal year. To date, 
actual hiring has been delayed somewhat, but the SFPD still 
anticipates that they will be able to successfully hire a total of 
205 new Police Officers by the end of the Fiscal Year. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

94 



Memo to Finance and Labor Committee 

January 17, 2001 Finance and Labor Committee Meeting 



The Budget Analyst's projection that Police Overtime was 
underbudgeted by at least $2,250,000 and that Uniform Salaries 
and related Fringe Benefits was overbudgeted by $1,338,525, as 
reported to the Finance and Labor Committee in June of 2000 
was, in fact, correct. This has permitted the SFPD to spend 
substantially more money on overtime then authorized by the 
Board of Supervisors. Such overtime spending is presently 
anticipated to exceed the Police Department's budgeted overtime 
by $3,788,277. 

The Budget Analyst will provide the Finance and Labor 
Committee with an updated FY 2000-2001 budget status report 
when tbe SFPD submits their request for release of the separate 
reserve of $1,700,195 later in the Fiscal Year. 



Recommendation: Approve the requested release of $4,297,098 in reserved 
overtime funds. 



Harvey M. Rose 



Supervisor Yee 
President Ammiano 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

95 



City and County of San Francisco 

Meeting Minutes 

Finance and Labor Committee 

Members: Supervisors Leland Yee, Tom Ammiano and Mark Leno 
Clerk: Gail Johnson 



City Hall 

1 Dr. Carlton B. 

Goodlett Place 

San Francisco, CA 

94102-4689 



Wednesday, January 24, 2001 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Leland Y. Yee, Tom Ammiano, Mark Leno. 



MEETING CONVENED 

The meeting convened at 10:06 a.m. 

010041 [Memorandum of Understanding Amendment No. 3 - Electrical Workers, Local 6] 

Ordinance implementing Amendment No. 3 to the 1997-2001 Memorandum of Understanding between the 
International Brotherhood of Electrical Workers, Local 6 and the City and County of San Francisco 
reconfirming the agency shop provision thereof effective July 1, 2000. (Human Resources Department) 
1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Villagomez, Deputy Director, Employee 
Relations Division, Department of Human Resources. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



010042 [Memorandum of Understanding Amendment No. 3 - Glaziers, Local 718] 

Ordinance implementing Amendment No. 3 to the 1997-2001 Memorandum of Understanding between the 
Glaziers, Architectural Metal and Glass Workers, Local Union 718 and the City and County of San Francisco 
reconfirming the agency shop provision thereof effective July 1, 2000. (Human Resources Department) 
1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Villagomez, Deputy Director, Employee 
Relations Division, Department of Human Resources. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



010043 [Memorandum of Understanding Amendment No. 4 - Laborers, Local 261] 

Ordinance implementing Amendment No. 4 to the 1997-2001 Memorandum of Understanding between the 
Laborers International Union, Local 261 and the City and County of San Francisco reconfirming the agency 
shop provision thereof effective July 1, 2000. (Human Resources Department) 
1/5/01, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Villagomez. Deputy Director. Employee 
Relations Division, Department of Human Resources. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



City and County of San Francisco 



Printed at S: 13 PU 



Finance and Labor Committee 



Meeting Minutes 



January 24, 2001 



010044 [Memorandum of Understanding Amendment No. 3 - Machinists, Local 1414] 

Ordinance implementing Amendment No. 3 to the 1997-2001 Memorandum of Understanding between the 
Machinists Union, Local 1414, International Association of Machinists and Aerospace Workers, Machinists 
Automotive Trades District Lodge 190 and the City and County of San Francisco reconfirming the agency shop 
provision thereof effective July 1, 2000. (Human Resources Department) 
1/5/01, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Alice Vdlagomez. Deputy Director, Employee 
Relations Division, Department of Human Resources. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



010045 (Memorandum of Understanding Amendment No. 2 - Pile Drivers, Local 34| 

Ordinance implementing Amendment No. 2 to the 1997-2001 Memorandum of Understanding between the Pile 

Drivers, Divers, Carpenters, Bridge, Wharf and Dock Builders, Local Union No. 34 and the City and County of 

San Francisco reconfirming the agency shop provision thereof effective July 1, 2000. (Human Resources 

Department) 

1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Alice Vdlagomez, Deputy Director, Employee 
Relations Division, Department of Human Resources. 
RECOMMENDED by the following vote: 

Ayes: 3 - Yee, Ammiano, Leno 



010046 [Memorandum of Understanding Amendment No. 1 - Plumbers. Local 38| 

Ordinance implementing Amendment No. 1 to the 1997-2001 Memorandum of Understanding between the 
United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry, Local No. 38 
and the City and County of San Francisco reconfirming the agency shop provision thereof effective July 1, 
2000. (Human Resources Department) 

1/5/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Haney Rose, Budget Analyst; Alice Vdlagomez, Deputy Director, Employee 
Relations Division, Department of Human Resources. 
RECOMMENDED by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



City and County of San Francisco 



Printed at 5:1.1 P\t on .? .? fU 



Finance and Labor Committee Meeting Minutes January 24, 2001 



010021 [November 2000 Branch Library Bond Program] 
Supervisor Yee 

Hearing to determine and ensure that the voters' intent in approving the November 2000 Branch Library Bond 
Program is honored by the San Francisco Public Library and the San Francisco Library Commission; and to 
receive information from the San Francisco Public Library about where they intend to get the funds to 
implement both the first and second phases of improvements to the Main Library. 
1 /2/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, Acting City Librarian; 
Edward Harrington, Controller; Chris Ortiz, Member, Council of Neighborhood Libraries; Sue Cauthen, 
Member, Council of Neighborhood Libraries; Peter Warfield; Chuck Forrester, Executive Director, Friends 
and Foundation of Library; Deborah Doyle, Member of Board, Friends and Foundation of Library and 
Council of Neighborhood Libraries; Ellen Hubert, Member of Board, Friends and Foundation of Library; 
Theodore Lakey, Deputy City Attorney. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Yee, Ammiano, Leno 



ADJOURNMENT 



The meeting adjourned at 11:01 a.m. 



City and County of San Francisco 3 flimted at 5:1 J PM on < w'J 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 

DOCUMENTS DEPT 

CITY AND COUNTY '^^MMIir^' 0F SAN FRANCISCO 



3 




JAN 2 3 2001 

BOARD OF SUPERVISORS SAN FRANCISCO 

PUBLIC LIBRARY 
BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 

January 18, 2001 

TO: 'Finance and Labor Committee 

FROM: , Budget Analyst 

SUBJECT: January 24, 2001 Finance and Labor Committee Meeting 

Items 1. 2. 3. 4. 5 and 6 - Files 01-0041. 01-0042. 01-0043. 01-0044. 01-0045 
and 01-0046 

Department: Department of Human Resources (DHR) 

Items: File 01-0041: Ordinance implementing Amendment 

No. 3 to the FY 1997-2001 four year Memorandum 
of Understanding between the International 
Brotherhood of Electrical Workers, Local 6 and the 
City and County of San Francisco reconfirming the 
Agency Shop provision thereof effective July 1, 
2000. 

File 01-0042: Ordinance implementing Amendment 
No. 3 to the FY 1997-2001 four year Memorandum 
of Understanding between the Glaziers, 
Architectural Metal and Glass Workers, Local 
Union 718 and the City and County of San 
Francisco reconfirming the Agency Shop provision 
thereof effective July 1, 2000. 

File 01-0043: Ordinance implementing Amendment 
No. 4 to the FY 1997-2001 four year Memorandum 
of Understanding between the Laborers 
International Union, Local 261 and the City and 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 

County of San Francisco reconfirming the Agency 
Shop provision thereof effective July 1, 2000. 

File 01-0044: Ordinance implementing Amendment 
No. 3 to the FY 1997-2001 four year Memorandum 
of Understanding between the Machinist Union, 
Local 1414, International Association of Machinists 
and Aerospace Workers Machinists Automotive 
Trades District Lodge 190 and the City and County 
of San Francisco reconfirming the Agency Shop 
provision thereof effective July 1, 2000. 

File 01-0045: Ordinance implementing Amendment 
No. 2 to the FY 1997-2001 four year Memorandum 
of Understanding between the Pile Drivers, Divers, 
Carpenters, Bridge Wharf and Dock Builders, Local 
Union No. 34 and the City and County of San 
Francisco reconfirming the Agency Shop provision 
thereof effective July 1, 2000. 

File 01-0046: Ordinance implementing Amendment 
No. 1 to the FY 1997-2001 four year Memorandum 
of Understanding between the United Association 
of Journeymen and Apprentices of the Plumbing 
and Pipe Fitting Industry, Local No. 38 and the 
City and County of San Francisco reconfirming the 
Agency Shop provision thereof effective July 1, 
2000. 

Description: The proposed ordinances would amend 

(Amendments 1, 2, 3 or 4 depending on the union, 
see above) six existing FY 1997-98 through FY 
2000-01 four-year Memoranda of Understanding 
(MOUs), retroactive for the one year period from 
July 1, 2000 through June 30, 2001 to reaffirm the 
Agency Shop provisions, that are currently 
included in the existing MOUs, with the following 
six unions: 

1. International Brotherhood of Electrical 
Workers, Local 6; 

2. Glaziers, Architectural Metal and Glass 
Workers, Local 718; 

3. Laborers International Union, Local 261; 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 

4. Machinist Union, Local 1414, which includes 
the International Association of Machinists and 
Aerospace Workers Machinists Automotive 
Trades District Lodge 190 

5. Pile Drivers, Divers, Carpenters, Bridge, Wharf 
and Dock Builders, Local 34; and 

6. United Association of Journeymen and 
Apprentices of the Plumbing and Pipe Fitting 
Industry, Local 38. 

In accordance with the State Meyers-Millias-Brown 
Act, California Government Code Sections 3500- 
3510, an Agency Shop means an arrangement that 
requires an employee, as a condition of continued 
employment, either to join the recognized employee 
organization (union), or to pay the employee 
organization a service fee in an amount not to 
exceed the employee organization's standard 
initiation fee, periodic dues, and general 
assessments of such employee organization for the 
duration of the bargaining agreement (or 
Memorandum of Understanding), or a period of 
three years from the effective date of such 
agreement, whichever period is less. 

According to Ms. Alice Villagomez of the 
Department of Human Resources (DHR), although 
union membership in an employee organization 
having MOUs with the City and County of San 
Francisco is voluntary, if an employee chooses not 
to join a union, and that union has included an 
agency shop provision in their MOU, then that 
employee can be charged the agency shop fees by 
the employee organization that represents that 
employee's classification. The proposed six 
ordinances address the agency shop provisions for 
those City employees that are represented but do 
not voluntarily join one of the subject six unions. 
Ms. Villagomez advises that the agency shop fees 
are typically less than the total union membership 
fees charged to employees that choose to join the 
union because the agency shop fees can only 
include the costs for representation and cannot 
include the union's expenses for other non- 
representation activities, such as political 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 

activities. Ms. Mary Hao advises that most, but not 
all of the City's MOUs contain agency shop fee 
provisions, and that State law prohibits 
supervisory, confidential or managerial employees 
from being subject to agency shop provisions. 

The Attachment, provided by DHR, identifies (1) 
the number of employees that would be affected by 
the subject ordinances and (2) the amounts such 
employees pay on a biweekly basis to join each of 
the subject unions and (3) the amounts such 
employees pay on a biweekly basis if they do not 
join each union and instead are assessed the 
agency shop fees for each of the six MOUs. As 
shown on the Attachment, individual employees 
are charged agency shop fees, ranging from $15 to 
$35.78 per biweekly pay period, or a total of 
approximately $390 to $930 per year. 

The Attachment contains variations in the amount 
of fees paid by employees in three of the subject 
unions (i.e., Plumbers Local 38, Laborers Local 261 
and Electricians Local 6) because of internal 
variations in each of the union's formulas for 
assessing dues and agency shop fees. DHR advises 
that the number of employees indicated on the 
Attachment for each union do not include the 
supervisory, confidential or management 
employees within each union, because, as noted 
above, supervisory, confidential and management 
employees are not required to join an employee 
organization and the agency shop provisions are 
not enforceable for such positions. 

Comments: 1. According to Ms. Villagomez, the six subject 

MOUs currently contain identical language to the 
language that is now being proposed regarding the 
Agency Shop provisions. These new amendments 
are being proposed because, as noted above, in 
accordance with the Meyers-Mil 1 i as-Brown Act, 
State Government Code Sections 3500-3510, the 
Agency Shop provisions can only be in effect for a 
maximum of three years. The existing six MOUs 
extend for a four-year period, from July 1, 1997 
through June 30, 2001. Therefore, after the third 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 



year of the existing MOUs, which ended on June 
30, 2000, these Agency Shop provisions were no 
longer in effect. 

All of the subject ordinances would therefore 
amend the existing six MOUs, and reaffirm the 
same Agency Shop provisions as existed between 
FY 1997-98 through FY 1999-2000 to now become 
effective for FY 2000-01. All of the proposed 
amendments, for the existing six unions would be 
effective for the one year period, retroactive from 
July 1, 2000 through June 30, 2001, to meet the 
State's three-year limitation requirement. 

2. According to Ms. Hao, these amendments are 
only now being brought before the Board of 
Supervisors for approval, almost seven months 
after their effective date of July 1, 2000, because 
the City Attorney's Office recently made DHR 
aware of the State's three-year limitation on the 
Agency Shop provisions. 

3. Ms. Hao advises that the State's three-year 
limitation for Agency Shop provisions in the 
Meyers-Millias-Brown Act, was recently amended 
by the State Legislature, such that effective 
January 1, 2001, there are no limitations on the 
length of time such Agency Shop provisions are 
effective in multi-year MOUs. 

4. Given that the proposed amendments would 
simply reaffirm existing Agency Shop provisions, 
the proposed ordinances would not have any fiscal 
impact on the City. However, as shown on the 
Attachment, individual employees would be 
charged agency shop fees, ranging from $15 to 
$35.78 per biweekly pay period, or a total of 
approximately $390 to $930 per year. 

These Agency Shop fees are deducted by the 
Controller's Office, from the individual employees 
paychecks on a biweekly basis. Ms. Pamela Levin 
of the Controller's Office confirms that the proposed 
ordinances would not result in any incremental 
costs to the City. Ms. Levin also advises that the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 

Controller's Office charges a payroll deduction fee 
which is deducted from the Agency Shop fees 
transmitted to the employee organization to offset 
the Controller's cost of processing such deductions. 

5. In accordance with the Agency Shop provisions, 
the City is required to provide each newly hired 
employee with information regarding each union 
and the agency shop provisions specified in their 
MOU. In addition, the Controller is required to 
provide (1) a list to the union of all employees that 
are members of the union and (2) a list to the union 
of all employees that pay the agency shop fees, 
identifying the employee's name, employee 
classification number, department number and the 
amount deducted. 

6. In accordance with the Agency Shop provisions, 
the union is required to annually provide an 
explanation of the union's agency shop fees and 
sufficient financial information to employees to 
enable the employees who must pay service fees to 
gauge the appropriateness of the fees. In addition, 
the union must provide a reasonably prompt 
opportunity to the employees who they represent 
to challenge the amount of the agency shop fees 
before an impartial decision maker chosen by a 
nationally recognized arbitration agency, and the 
union is required to establish an escrow account to 
hold amounts reasonably in dispute while such 
challenges are pending. Each union also agrees to 
indemnify and hold the City harmless for any 
losses or damages arising from these provisions. 

7. As indicated above, most, but not all of the City's 
MOUs contain agency shop fee provisions. Further, 
State law prohibits supervisory, confidential or 
managerial employees from being subject to agency 
shop fee provisions. Therefore, the Budget Analyst 
considers approval of the subject ordinances, which 
do not affect all City employees, to be policy 
matters for the Board of Supervisors. 

Recommendation: Approval of the proposed ordinances are policy 

matters for the Board of Supervisors. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



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Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 



Item 7 - File 01-0021 

Department: 

Item: 



Description: 



Public Library 

Hearing to determine and ensure that the voters' intent 
in approving the November 2000 Proposition A, Branch 
Library Facilities Improvement Bond Program is honored 
by the San Francisco Public Library and the San 
Francisco Library Commission; and to receive information 
from the San Francisco Public Library about where they 
intend to get the funds to implement both the first and 
second phases of improvements to the Main Library. 

The Proposition A, Branch Library Facilities 
Improvement Bond, approved by the San Francisco voters 
in November of 2000, authorized $105,865,000 in General 
Obligation Bond monies for the acquisition, 
rehabilitation, renovation, improvement, construction and 
reconstruction of certain improvements and renovations 
to 24 Branch Libraries and to the Public Library's 
System-Wide Support Center/Brooks Hall (see 
Attachment I, provided by the Public Library for a list of 
the 24 Branch Libraries and the System-Wide Support 
Center/Brooks Hall), according to Mr. George Nichols 
from the Library. 

On June 19, 2000, the Board of Supervisors approved a 
resolution to submit to the San Francisco voters on 
November 7, 2000, a proposition to incur bonded 
indebtedness of the City and County, in the principal 
amount of $129,425,000 for the acquisition, construction 
and reconstruction of certain improvements to Public 
Library Branch Facilities (File 00-1058). On June 29, 
2000, a second resolution was submitted to the Board of 
Supervisors as a substitute for the resolution approved by 
the Board of Supervisors on June 19, 2000. However, the 
amount of the Library's proposed bonded indebtedness 
was reduced to $105,865,000, a reduction of $23,560,000 
(File 00-1147) in this second resolution. According to Mr. 
Nichols, the reduction in the Branch Library Facilities 
Improvement Bond amount was due to recommendations 
by the City's Capital Improvement Advisory Committee 
(CIAC) for (a) the elimination of site acquisition costs for 
the proposed new Branch Library located in Mission Bay, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

8 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 



(b) a reduction in costs for the proposed System-Wide 
Support Center/Brooks Hall renovation, (c) the 
availability of State Proposition 14 1 funding, and (d) the 
availability of $2,400,000 from the Earthquake Safety 
Program II fund. Mr. Nichols advises that the Mission 
Bay Branch Library site acquisition costs were eliminated 
because the Public Library is working with the 
Redevelopment Agency to house the Mission Bay Branch 
Library with a neighborhood Senior Citizen Center to be 
located in Mission Bay. Mr. Nichols states that the 
System-Wide Support Center/Brooks Hall renovation 
costs were reduced because alternatives to the renovation 
of Brooks Hall and the construction of a new System-Wide 
Support Center as separate projects were reviewed, and 
found to be more cost effective by the CIAC. 

Mr. Nichols advises that even though the bond amount 
was reduced, the bond resolution language remained the 
same. Such language specifically prohibited the Public 
Library from using any of the Proposition A, Branch 
Library Facilities Improvement Bond monies on 
improvements to the Main Library. On November 7, 
2000, 74.38 percent of San Francisco voters approved 
Proposition A, the Branch Library Improvement Bond for 
$105,865,000. 

Although the subject hearing references phase one and 
two of improvements to the Main Library, Mr. Nichols 
states that there are no stipulated phases for the 
improvements to the Main Library. 

According to Mr. Nichols, an independent Post Occupancy 
Evaluation (POE) Final Report on the Main Library 
prepared by a consultant team consisting of an architect 
and two library consultants, was issued in January of 
2000, outlining suggestions for improvements to the Main 
Library facilities totaling approximately $28,000,000 as 
detailed in the San Francisco Public Library POE. Such 
funds would be subject to appropriation approval of the 
Mayor and the Board of Supervisors. Since the issuance 
of the Final POE, the Library has been examining the 



1 Proposition 14, approved by the voters in March of 2000, provides $350 million of State-wide funds for library 
construction projects, which is available on a competitive basis, and requires a 35 percent local match. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 



POE recommendations to determine what 
recommendations are necessary to improve the building 
and, therefore, the efficiency of the Main Library. At the 
January 2, 2001 Library Commission Meeting, the 
Library presented the Commission with the Library 
staffs prioritized list of desired improvements for the 
Main Library which totaled approximately $5,272,500 
(see Attachment II provided by the Public Library). Mr. 
Nichols advises that the Library Commission did not 
approve moving ahead with any projects on the list at 
that time. Mr. Nichols further advises that any projects 
for the Main Library approved by the Library Commission 
would also have to be approved by the Mayor and the 
Board of Supervisors and would be funded by fund 
balances remaining in the original 1988 $109,527,000 
Library Improvement Bond, which currently total 
approximately $4,300,000. 2 In addition, Mr. Nichols 
advises that approval by the Mayor and the Board of 
Supervisors would be required to use unappropriated 
fund balances from the Proposition E, Library 
Preservation Fund to fund Main Library improvements. 
The Library is projecting a Library Preservation Fund 
fund balance of approximately $2,500,000 to $3,000,000 at 
the end of the FY 2000-2001. According to Mr. Nichols 
the Library would not use the November 2000 Proposition 
A, Branch Library Facilities Improvement Bond monies 
for any capital improvements to the Main Library. The 
balance in the 1988 Library Improvement Bond 
($4,300,000) and the estimate balance in the Library 
Preservation Fund ($2,500,000 to $3,000,000) would be 
more than enough to fund the Public Library 
improvements of $5,272,500 for the improvements to the 
Main Library and are subject to appropriation approval of 
the Mayor and the Board of Supervisors. 

Mr. Nichols further advises that at its January 18, 2001 
meeting, the Library Commission will consider approval 
of a $1,549,886 supplemental appropriation for renovation 
and repairs to the Main Library in FY 2000-2001. The 
Attachment III, provided by the Public Library, highlights 



2 Mr. Nichols advises that of the original $109.5 million 1988 Library Improvement Bond, S102.5 million was 
expended on the Main Library, and $4,831,284 was expended on the Branch Libraries, including $359,641 for the 
Mission Branch, $1,826,506 for the Chinatown Branch, $1,005,066 for the Sunset Branch, $999,071 for the Park 
Branch and $641,000 for the Presidio Branch. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 

the proposed projects totaling an estimated $1,549,886. 
Mr. Nichols advises that based on the Controller's 
anticipated six-month revenue projections 3 , the Library 
proposes to spend $250,000 from unappropriated 
Proposition E Library Preservation Funds, $586,000 from 
unappropriated General Fund revenue mandated by 
Proposition E for Library use and $713,886 from the 1988 
Library Improvement Bond for a total of $1,549,886 to 
support the proposed projects highlighted in Attachment 
III for the Main Library. Although, the proposed 
$1,549,886 of projects were recommended by the POE, 
these projects are not part of the approximately 
$5,272,500 package the Public Library staff discussed 
with the Library Commission on January 2, 2001, except 
for a $50,000 request for a signage consultant. Mr. 
Nichols advises that the proposed projects totaling 
$1,549,886, are, for the most part, projects recommended 
in the POE that can be completed independent of other 
modifications to the Main Library that will be more 
complicated to execute. 

According to Mr. Nichols, the Public Library is currently 
planning the implementation of the Proposition A, Branch 
Library Facilities Improvement Bond Program, which 
may include the creation of a 2000 Proposition A, Branch 
Library Facilities Improvement Bond Oversight 
Committee. Members may include individuals from the 
Library Commission, the Council of Neighborhood 
Libraries, the Friends and Foundation of the San 
Francisco Public Library, the Board of Supervisors, the 
Mayor's Office and interested community members. One 
aspect of the Proposition A, Branch Library Facilities 
Improvement Bond Oversight Committee's role could be 
to ensure that the Proposition A, Branch Library 
Facilities Improvement Bond monies totaling 
$105,865,000 are spent as specified in the legislation the 
voters approved on November 7, 2000, according to Mr. 
Nichols. 

Recommendation: Request the Public Library to instruct its 2000 

Proposition A, Branch Library Facilities Improvement 



3 As of the writing of this report, according to Mr. Joe Matranga of the Controller's Office, the preliminary six- 
month projections appear to be accurate. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 24, 2001 Finance and Labor Committee Meeting 



Supervisor Yee 
President Ammiano 
Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



Bond Oversight Committee to issue reports to the Finance 
and Labor Committee on a semi-annual basis which detail 
all expenditures from the bond funds by facility and by 
individual projects. 




BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



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13 



fvccacnment 11 




San Francisco Public Library 

Memorandum lOO Larkin Street, San Francisco, CA 94102 

To: Library Commissioners 
From: Susan Hildreth, Acting City Librarian J ft 
Re: Post Occupancy Evaluation Recommendations 
Date: January 2, 2001 

At the suggestion of President Higueras, staff has prepared for your review a detailed 
analysis of the recommendations that were included in the Post Occupancy Evaluation of 
the Main Library. We have addressed the nineteen major recommendations included in 
the report, including staff response, timeline and estimated costs for each 
recommendation. The report also contained specific recommendations regarding audio- 
visual systems which we are addressing but have not included in this document. 

In an attempt to summarize information contained in the report, I would like to highlight 
the following priorities identified by staff. 

Projects with most benefit to public and staff Total Cost - $5,272,500 

1 . Development of new master signage system to be completed by Fall 2001 . 
Estimated cost - $350,000 

2. Improvements to First Floor, Borrowers' Services area — A staff task force led by 
Ned Himmel is developing recommendations for this area, to be completed by 
June 2001. 

Estimated cost - $1,822,500 

3. Expansion of First Floor for public services - Dependant on relocation of 
Technical Services; determination of new location to be made by Fall 2001. 
Estimated cost -$1,890,000. Does not include cost of relocation of 
Technical Services. 

4. Improvements to First Floor restrooms - Dependant on relocation of 
Technical Services. 

Estimated cost - $400,000 

5. Improvements to Second Floor - To be developed by January 2002. 
Estimated cost - $810,000 

Modifications to the Third Floor, including reconfiguring service desks and increasing 
public space, will also be reviewed by staff. Estimated costs are $2,600,000. 

Staff recommends that the Library Improvement Fund, with a balance of about 
$4,000,000, be used to support these modifications as they are developed. The Library 
Improvement Fund contains accrued interest and funds remaining from the bond for 
the construction of the Main Library. Staff is preparing a supplemental budget request 
including recommended building fixes that are not included in the above information that 
is planned for consideration on the 1/18/01 agenda. 



14 



Attachment I 
Page 1 ot 4 



GROUP 1 PROJECTS 



Project Project Description/Justification Est. Cost 


1 . Loading Dock 


The loading dock services the Main Library as well as 
Brooks Hall. The existing dock and lift cannot accommodate 
the variety of delivery vehicles that use the dock. This 
results in potentially hazardous conditions as loads must be 
manually off-loaded from trucks and lifted onto the dock. 
This project involves the purchase and installation of a 
mechanical lift that can handle the various delivery vehicles. 


$34,500 


2. Seismic Joint 


The seismic joint requires modification, redesign, and/or 
repair due to inadequate sealing. The Library experiences 
water intrusion around the entire Main Library perimeter 
footprint and at the curtain wall pre -cast joints during 
inclement weather and paving wash down activities. The 
project involves installation of new flashing to redirect 
water, or installation of a gutter system to catch water. The 
Library has replaced damaged mildewing gypsum board 
several times because of water intrusion, and 
will continue to do so until a permanent fix is designed and 
installed. 


109,750 


3. Fire Doors 


This is a fire, life, safety issue. Fire doors located near the 
Grove Street entrance and in the gallery on the lower level 
are manually operated. These are two extremely heavy fire 
doors that have been taken off-line from the fire/life safety 
system because they currently close too swiftly, have 
damaged interior surfaces and could injure staff and patrons. 
This funding will allow the doors to be closed by motors 
rather than counterweights. The project involves purchase 
and installation of motors and control panels to operate the 
fire doors. 


40,480 


4. Public Address System 


The existing public address (PA) system is inadequate and 
needs upgrading. It does not cover non-public work areas on 
all floors including the lower level of the Main and Brooks 
Hall. This places staff working in those areas at risk in the 
event of an emergency. The project involves upgrading the 
PA system and extending the system into non-public work 
areas in the Main and in Brooks Hall. 


95,000 


5. Audio-Visual Systems 


The POE found deficiencies with the existing AV systems in 
the Koret and other public meeting rooms. The use of the 
Koret and other public meeting rooms in the Library has 
exceeded initial expectations and capacity of the Library. 
These rooms have become a significant resource for 
community group meetings, City Agency meetings, private 
events, and varied public programming. The existing AV 
system does not adequately meet the diversity of 
programming that now occurs. This project involves the 
purchase and installation of AV equipment capable of 
handling the diversity of programming that occurs at the 
Library. Equipment purchase and installation will be done in 
accordance with recommendations of an A/V design 


57,000 



15 



fage 2 ot 4 





consultant. 




6. Elevators 


Elevator #7 serves the lower level, 1 st and 2 nd floors. It's 
motor often overheats during heavy use. This project would 
fund an oil cooler to prevent this problem from occurring. It 
would also fund refinishing of the all elevator interiors to a 
brushed finish to reduce vandalism and the cost of annual 
refinishing. Existing public elevator doors and cabs are 
covered with a mirror-like metal finish. Although attractive 
they are difficult and costly to maintain. The doors and cabs 
are subject to damage from normal use as well as from 
graffiti scratched or etched into the panels. The project 
involves refinishing the door and cab surfaces, converting 
them from their current highly reflective and mirror-like 
finish to a burnished scratch resistant surface. 


49,433 


7. Hyde Street Door 


This project involves reconfiguring the staff entry on Hyde 
Street. The existing door is set-back from the sidewalk 
creating a small alcove. During hours the Library is closed, 
the alcove is used as a urinal by people on the streets. This 
significantly increases maintenance of the area and is a major 
health concern for staff entering and leaving the building 
through this door. The project involves purchase and 
installation of a rolling gate that will cover the alcove during 
the hours the Library is closed and setting the existing doors 
back to accommodate the rolling gate. 


17,180 


8. Exterior Granite and 
Lighting Repairs 


Various granite pavers surrounding the building are broken 
and need to be replaced. Bollard lighting fixtures will 
provide needed evening illumination of the ramps and 
walkways on the Fulton and Larkin sides of the building. 


64,600 


9. Misc. Wall Repairs 


Several of the walls and columns with encaustic finishes 
have been damaged and need to be restored. Patrons using 
reader chairs near the north and west windows on floors 3, 4 
and 5 are constantly damaging the sheet rock since there is 
not much extra space between the back of the chair and the 
wall. Project involves repair of sheet rock and Installation of 
chair railings to prevent future damage. 


11,600 


10. 6 th Floor Public 
Storage/Locker 
Replacement 


Existing lockers on the 6 th floor would be replaced with a 
recessed display case that would include a tackable back 
surface and adjustable shelves. The lockers are virtually 
unused and the display case would enhance exhibits that are 
staged on the 6 th floor. The project involves design, 
construction, and installation of the display case. 


6,042 


11. Grove Street Entrance 
Display Case 


This project involves the installation of display cases in the 
Grove Street entryway. Display cases will replace benches 
that are currently there. Grove Street is a major entry point 
into the building and the display cases would provide a 
convenient and effective source of information regarding 
programs, exhibits, and public service announcements. 


14,850 


SUBTOTAL 
CONSTRUCTION 




5500,435 


Design Contingency 


10% 


50,044 


General Conditions 


10% 


50,044 


Contractor's Overhead and 


15% 


90,078 



16 



Attachment I J 
Page 3 of A 



Profit 






TOTAL EST. 
CONSTRUCTION BED 




$690,601 


Construction Contingency 




103,590 


TOTAL 
CONSTRUCTION 




$794,191 


Project Management, 
design, consultants, 
construction documents, 
permits, and management 


35% 


277,967 


TOTAL PROJECT 
COST 




$1,072,158 



GROUP 2 PROJECTS 



1 . Replace damaged table 
tops 


Tabletops in the public areas are heavily used and have been 
damaged through normal use and through deliberate acts of 
vandalism. Existing tabletops are constructed of wood. 
Although attractive they are difficult to maintain and 
unsightly when damaged. This project involves installing 
plastic laminate over existing wood tops for 60 tables. 
Laminate surfaces are easier to maintain and easier to repair 
when damaged. Project will be completed by the Bureau of 
Building Repair (BBR)/DP W. 


S30.000 


2. Door Stop Fabrication 
and Installation 


Many of the doorstops used at glass doors are broken. A 
new type of doorstop has been tested by DPW and the 
Library that has proven to be effective in stopping these 
heavy glass doors from hitting walls/furniture. Project will 
be completed with the assistance of the Bureau of Building 
Repair/DP W. All glass door locations will be equipped with 
these doorstops. 


6,825 


3. Signage Consultant 


A major finding of the POE was the inadequacy of signage 
in the Library. The report found that inadequate signage 
reduces operational efficiency by creating an over-reliance 
on staff by the public for basic directions and poses a barrier 
to the public's access to materials and services. The POE 
specifically noted that signage is not visible in the line of 
travel, stack signage is deficient, and that directional signs 
are not clear. The POE recommended that a signage 
consultant with a background in way-finding design for 
public facilities like the library be hired to develop a signage 
system that will mitigate existing problems and after the 
initial signs are done, can be replicated at a low-cost. This 
project provides funds to develop an RFP for consulting 
services and funds to pay for the consultant once selected. 


50,000 


4. Audio/Visual Systems 
Design 


Project involves hiring an A/V consultant to assess and 
design an appropriate system. 


20,000 


5. Radio Repeater 
System 


This is a fire, life, safety issue. There are numerous "dead" 
areas in the building where radio signals and communication 
cannot take place. Radio signals cannot be picked up in 
Brooks Hall. Because of these "dead" areas, Library 


230,000 



17 



Attachment III 
Page 4 of 4 





personnel, private contractors, and emergency personnel 
working in these areas cannot communicate via radio and 
this places them at risk in emergency situations. The 
portable radio repeater system will allow for radio 
transmission in all areas of the main library and in Brooks 
Hall. Transmitting devices will be wired and installed which 
will provide needed radio signaling necessary for normal 
operations and for emergencies. The Library will work with 
DTIS to complete this project. 




TOTAL, OTHER 
PROJECTS 




S336,825 


PROJECT RESERVE 




$140,903 


TOTAL COSTS 




$1,549,886 



SOURCES 

Library Preservation Fund (Proposition E) 

General Fund (Proposition E Mandated Contribution) 

Library Improvement Fund 



$250,000 
$586,000 
$713,886 



18 



City and County of San Francisco Cit y Ha " 

J J 1 Dr. Carlton B. 

Meeting Minutes Goodiett Place 

San Francisco, CA 

Finance and Labor Committee 94102-4689 



t>Tfo^ 



Wednesday, January 31, 2001 10:00 AM City Hall, Room 263 

Regular Meeting 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:04 a.m. 

002145 [S. F. International Airport Advertising Program Lease] 

Resolution approving San Francisco International Airport Advertising Program Lease between Transportation 

Media, Inc. (a division of Eller Media) and the City and County of San Francisco, acting by and through its 

Airport Commission. (Airport Commission) 

12/6/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

1/17/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Governmental Affairs 

Administrator, Airport 

Continued to January 31, 2001. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst: Cathy Weidner, Government Affairs 
Administrator, Airport: Theodore Lakey, Deputy City Attorney; Theresa Rivor, Concessions Development 
Manager, Airport. 

Amended at the end of line 5 by adding "requiring notice to the Finance Committee of any proposed 
advertising program expansion. " Further amended by adding the following: "FURTHER RESOLVED. That 
the Airport Director shall communicate with the Finance Committee before implementing any proposal to 
expand the advertising program approved by this resolution. " New title. 
AMENDED. 

Resolution approving San Francisco International Airport Advertising Program Lease between Transportation 
Media, Inc. (a division of Eller Media) and the City and County of San Francisco, acting by and through its 
Airport Commission; requiring notice to the Finance Committee of any proposed advertising program 
expansion. (Airport Commission) 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco I Printed at StH PH on SOW 



Finance and Labor Committee Meeting Minutes January 31, 2001 



002187 [Contract between the Dept. of Public Health and Health Advocates, LLP to provide uncompensated 
care recovery services] 

Resolution authorizing the Director of Public Health and the Purchaser to execute a contract between the City 

and County of San Francisco and Health Advocates, LLP to provide uncompensated care recovery services. 

(Public Health Department) 

12/13/00, RECEIVED AND ASSIGNED lo Public Health and Environment Committee 

12/28/00, TRANSFERRED to Finance and Labor Committee. At the request of the President, this matter is to be scheduled for the 

January 10,2001 meeting. 

1/17/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose. Budget Analyst, Monique Zmuda, Chief Financial Officer, 

Department of Public Health. Steve Reid, President. Paralign, Diane Sovereign (attorney), Linda Safir. Director of Sales, Parahgn. Karla 

Fine, Manager, Paralign; Fanny Mayorga, Paralign; Juan Sosa, Paralign. Helen Lim, Paralign; Robert McCarthy (registered to speak for 

Paralign), Al Leibovic, Health Advocates, Theodore Lakey, Deputy City Attorney, Edward Hamngton, Controller. 

Continued to January 3 1 , 200 1 . 

Heard in Committee. Speakers: Haney Rose. Budget Analyst; Monique Zmuda, Chief Financial Officer, 
Department of Public Health. 
Continued to February 7. 2001. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010053 [Lease of property at 1421 Broderick Street for Department of Public Health to operate a residential 
care facility for persons who need 24-hour care and supervision! 

Resolution authorizing and approving the lease by and between the City and County of San Francisco, for the 
Department of Public Health, as tenant, and Seto Family Trust, as landlord, for the property located at 1421 
Broderick Street. (Real Estate Department) 
1/10/01, RECEIVED AND ASSIGNED to Finance and Labor Committee 

Heard in Committee. Speakers: Han'ey Rose, Budget Analyst; Marc Trot:, Department of Public Health; 
Monique Zmuda. Chief Financial Officer. Department of Public Health; Anthony Delucchi. Director of 
Property, Real Estate Department; Richard Robinson, Community Organizer. Community Outreach Program. 
Amended on page 2, line 5. by replacing "SO. 67" with "SO. 81. " 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010104 [Settlement of Grievance. Local 21 [ 

Resolution authorizing settlement of the grievance filed by Glen Alston and the International Federation of 

Professional and Technical Engineers. Local 21. AFL-CIO ("Local 21"). on behalf of 16 Civilian Fire 

Inspectors pursuant to the Memoranda of LTnderstanding between Local 21 and the City and County of San 

Francisco in the aggregate amount of $80,080.48. (Human Resources Department) 

1/17/01, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

Heard in Committee. Speakers: Han'ey Rose, Budget Analyst. Alice I'illagomez. Deputy Director. Employee 

Relations Division, Department of Human Resources; Chief Gary Massetani. Bureau of Fire Inspection, Fire 

Department; Martin Gran, Deputy City Attorney; Glenn Alston. 

Amended on lines 8 and 13. by replacing "$80,080.48" with "S81.625.52. " New title. 

AMENDED. 



City and County of San Francisco 2 Printed at ?:I5 PM on J 3 M 



Finance and Labor Committee Meeting Minutes January 31, 2001 

Resolution authorizing settlement of the grievance filed by Glenn Alston and the International Federation of 
Professional and Technical Engineers, Local 21, AFL-CIO ("Local 21"), on behalf of 16 Civilian Fire 
Inspectors pursuant to the Memoranda of Understanding between Local 21 and the City and County of San 
Francisco in the aggregate amount of $81,625.52. (Human Resources Department) 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



ADJOURNMENT 



The meeting adjourned at 11:33 a.m. 



City and County of San Francisco 3 ''"""■ J * *'* Mi on J 3 M 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



3 

hi /a 




DOCUMENTS DEPT. 

OF SAN FRANCISCO ,*». , ?nm 

SAN FRANCISCO 
^BOARD OF SUPERVISORS PUBLIC LIBRARY 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 

January 25, 2001 

TO: <: Finance and Labor Committee 

FROM: 'Budget Analyst 

SUBJECT: January 31, 2001 Finance and Labor Committee Meeting 

Item 1 - File 00-2145 



Note: This item was continued by the Finance Committee at its meeting of 

January 17, 2001. 



Department: 
Item: 



Lessor: 



Lessee: 



Airport 

Resolution approving a new Advertising Program Lease 
between Transportation Media, Inc. and the City and 
County of San Francisco, acting by and through its 
Airport Commission. 

City and County of San Francisco, acting by and through 
its Airport Commission 

Transportation Media, Inc., a division of Eller Media 
Company, Inc., an Illinois-based company. 



Locations Being 
Leased: 



According to Mr. Bob Rhoades of the Airport, there are 
144 locations for the proposed advertising, divided into 
two categories: 

• Wall-mounted advertising spaces in the Airport's 
parking structures, transit stations, shuttle bus 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 



interiors, non-terminal bus shelters, the rental car 
center, and parking area connector tunnels. 
• Silent monitors in the International Terminal's 
boarding areas. Silent monitors are 27 inch high-tech 
screens. 

None of the proposed 144 advertising locations would be 
in the Airport's North Terminal, South Terminal, or 
former International Terminal. 



Revenue Generated: 



Term of Lease: 



Right of Renewal: 



Description: 



Under this proposed lease, Transportation Media, Inc. is 
required to pay the Airport a first year Minimum Annual 
Guarantee of $4,050,000 or 70 percent of gross revenues, 
whichever is higher. The proposed lease states that the 
Minimum Annual Guarantee shall be increased annually 
by the amount of the Consumer Price Index's annual 
increase (adjusted for any decrease in the annual number 
of enplanements). If further advertising sites are added 
to the lease, then the Minimum Annual Guarantee would 
be increased on a pro rata basis, as determined by the 
Airport. 

Five years from the earlier of (a) the date on which any 
advertising is installed, or (b) February 1, 2001. 

Three one-year options exercisable at the Airport 
Commission's sole option. Mr. Rhoades states that there 
is no right of renewal beyond the maximum term of eight 
years and that any future lease would be subject to a 
Request for Proposal (RFP). 

According to Mr. Rhoades, the Advertising Program Lease 
represents a new source of revenue for the Airport. Mr. 
Rhoades advises that the Airport Commission has had a 
policy banning advertising inside the Airport's terminals 
since the 1980s. This policy was amended in early 2000 
when the Airport Commission decided to permit (a) 
advertising panels in certain limited areas within the 
Airport's parking structures, transit stations, shuttle bus 
interiors, non-terminal bus shelters, the rental car center, 
and parking area connector tunnels, and (b) silent 
monitors in the International Terminal's boarding areas. 
The advertising display equipment would be subject to 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 

approval by tbe Airport's Design and Review Committee 1 , 

while other Airport staff would be responsible for 
reviewing the advertisements' content. The proposed 
lease prohibits advertisements which violate the Airport 
Advertising Standards Policy, including those which (a) 
advertise alcohol or tobacco products, (b) espouse political 
or religious views, (c) promote any illegal activity, 
gambling, or services in direct competition with the 
Airport's business objectives, or (d) contain offensive 
imagery or language. Transportation Media, Inc. would 
coordinate all of the advertisers. 

Comments: The Airport's Proposed Lease with Transportation 

Media. Inc. 

1. The RFP for the proposed lease was issued by the 
Airport in July of 2000 and firms were required to submit 
proposals with a Minimum Annual Guarantee of 
$2,000,000 or more. According to Mr. Patrick Quinn of 
the Airport, the Airport notified approximately 25 firms of 
an informational conference which was held on June 28, 
2000. Seven of the firms which attended were 
subsequently sent a copy of the Airport's RFP. The seven 
firms which received the RFP were Airport Consulting 
Incorporated, Blazers Airport Advertising, Cartelera 
Communications, Eller Media (Transportation Media, 
Inc.), Foster Media, JC Decaux (Skysites Airport 
Advertising), and Leigh Fisher Associates. The Airport's 
RFP was issued at the same time as a consortium of 
airlines issued a similar RFP for a separate advertising 
program in the loading bridges (the moveable corridors, 
mostly owned by the airlines, which connect the terminals 
to the airplanes). Mr. Rhoades states that on October 23, 
2000 the Airline Consortium chose Transportation Media, 
Inc. out of the three proposals which were submitted to 
the Airline Consortium (see Comments No. 4 - 9). In 
response to the Airport's RFP, on October 27, 2000 the 
Airport received only one proposal from Transportation 
Media, Inc. which had already been awarded the Airline 
Consortium's loading bridge advertising program license 
agreement. Attachment I, provided by the Airport, 



1 The Airport's Design and Review Committee consists of Mr. Michael Allen (Project Manager, 
Bureau of Design and Construction), Mr. Amir Koleini (Principal Architect, Facilities, Operations 
and Maintenance), and Mr. Robin Chiang (Architect). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 



explains why the Airport only received one bid in response 
to its RFP. 

2. The responsiveness of Transportation Media, Inc.'s 
proposal to the Airport RFP's minimum standards was 
evaluated by a five-member evaluation team comprising 
two outside consultants who are experts in design and 
advertising, one senior airline representative involved in 
advertising and promotions, an Airport official 
responsible for exhibitions, and an Airport Finance 
official. The Transportation Media, Inc. proposal included 
a Minimum Annual Guarantee to the Airport of 
$4,050,000 in the first year of the proposed lease, which is 
$2,050,000 or 102.5 percent more than the Minimum 
Annual Guarantee of $2,000,000 required under the 
Airport's RFP. 

3. The Minimum Annual Guarantee of $4,050,000 in 
Year 1 represents an average of approximately $28,125 
per year for each of the 144 advertising sites. According 
to Mr. Rhoades, the actual amount charged to each 
advertiser by Transportation Media, Inc. for each of those 
144 advertising spaces will be determined by rate cards 
which are set according to market values. The proposed 
lease provides for Airport verification of gross advertising 
revenues through (a) a monthly gross receipts report 
signed by the Lessee, (b) an unqualified year-end report 
certified by a certified public accountant, (c) periodic 
audits of the Lessee's gross receipts, and (d) other reports 
and submissions requested at the discretion of the Airport 
Director. According to Mr. Rhoades, Transportation 
Media, Inc. is already booking advertisers to use the 
advertising space which will be available under the 
proposed lease. 

Licensing Agreement Between the Airline 
Consortium and Transportation Media, Inc. 

4. At the direction of the Finance and Labor Committee, 
the Budget Analyst has analyzed the loading bridge 
advertising program license agreement between the 
Airline Consortium and Transportation Media, Inc. This 
license agreement covers the moveable corridors which 
connect the terminals to the airplanes. Most of these 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 



moveable corridors are owned by tbe airlines. According 
to Mr. Rboades, tbe idea of a loading bridge advertising 
program was initiated by a consortium of airlines wbicb 
own 60 domestic terminal loading bridges: American, 
Alaska, Continental, Delta, Nortbwest, United, and USA 
Airways. Tbe Airport Commission approved tbis concept, 
extending tbe program to include the 17 loading bridges 
the Airport owns in the new International Terminal 
which are operated by the San Francisco Terminal 
Equipment Company, LLC (SFOTEC), representing 25 
airlines which operate international flights out of the 
Airport 2 . In total, the Airline Consortium comprises 29 
airlines 3 and the loading bridge advertising program 
covers a total of 77 loading bridges (60 in the domestic 
terminals and 17 in the new International Terminal). Mr. 
Rhoades states that, once the Airport Commission 
authorized the loading bridge advertising program, the 
Airline Consortium ran its own competitive bid process 
without any involvement from the Airport. The Airline 
Consortium required Transportation Media, Inc. to pay 
the Airline Consortium either a Minimum Annual 
Guarantee of $75,000 per loading bridge, for a total of 
$5,775,000 per year, or 70 percent of gross revenues, 
whichever is higher. In turn, the Airline Consortium is 
required to pay the Airport either (a) $2,887,500 which is 
one half of the Minimum Annual Guarantee amount of 
$5,775,000, or (b) 35 percent of gross revenues, whichever 
is higher. 

5. The Airline Consortium received proposals from three 
firms: 

(a) Transportation Media, Inc. which, according to Mr. 
Quinn, proposed a Minimum Annual Guarantee of 
$75,000 per loading bridge, or $5,775,000 in total. 



2 SFOTEC members are Aeroflot, Air China, Air France, Alaska Airlines, All Nippon Airways, 
Allegro, Alitalia, Asiana, British Airways, Cathay Pacific, China Airlines, Eva Airways, Japan 
Airlines, KLM Royal Dutch Airlines, Korean Airlines, Lufthansa, Mexicana, Northwest, Philippine 
Airlines, Ryan International, Singapore Airlines, Swiss Air, Taca International, United Airlines, and 
Virgin Atlantic. 

3 The 29 airlines include 22 SFOTEC members which only operate international flights out of the 
Airport, four airlines which only operate domestic flights out of the Airport (American, Continental, 
Delta, and USA Airways), and three airlines which operate both international and domestic flights 
out of the Airport (Alaska, United, and Northwest). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 



(b) Skysites Airport Advertising, an affiliate of JC 
Decaux, wbich, according to Mr. Quinn, proposed a 
Minimum Annual Guarantee of $45,000 per loading 
bridge. Mr. Quinn noted that Skysites Airport 
Advertising's proposed Minimum Annual Guarantee 
was both (1) $30,000 per loading bridge less than the 
Minimum Annual Guarantee required by the Airline 
Consortium, and (2) based on an unrealistically high 
passenger throughput assumption of 2,000 
passengers per loading bridge per day which only 
United Airlines' loading bridges currently meet. 

(c) InPlaneView, Inc. which, according to Mr. Quinn, 
submitted neither a Minimum Annual Guarantee 
nor a performance bond. 

The Airline Consortium chose Transportation Media, Inc. 
which was the only proposer to meet the Airline 
Consortium's Minimum Annual Guarantee requirements. 
Attachment II, provided by the Airport, outlines the 
history and financial arrangements of the loading bridge 
advertising program. 

6. Mr. Quinn advises that each member of the Airline 
Consortium will sign an identical licensing agreement 
with Transportation Media, Inc. These documents cite 
the Airport's 50 percent required payment from either the 
Minimum Annual Guarantee received by the Airline 
Consortium (which is $2,887,500 for the Airport), or the 
70 percent of gross revenues (which is 35 percent of gross 
revenues for the Airport), whichever is higher. Once 
these licensing agreements have been signed, Mr. Quinn 
advises that the Airport will require each member of the 
Airline Consortium to sign a third party agreement with 
the Airport. This third party agreement (a) approves 
airline installation of advertising in the loading bridges, 
(b) establishes the Airport as a third party beneficiary, 
and (c) provides the Airport with the right to terminate 
the loading bridge advertising program license agreement 
between the Airline Consortium and Transportation 
Media, Inc. upon 30 days written notice from the Airport 
Director, at which time each airline would be required to 
cease all advertising on its loading bridges and remove 
the advertising panels. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 



7. At the Finance and Labor Committee meeting of July 
17, 2001, the Budget Analyst had questioned why the 
loading bridge advertising program license agreement 
between the Airline Consortium and Transportation 
Media, Inc. (in contrast to the subject proposed lease 
between the Airport and Transportation Media, Inc.), and 
the resulting revenues of at least $2,887,500 per year for 
the Airport, were not subject to Board of Supervisors 
approval. Mr. Rhoades states that the loading bridge 
advertising license agreement is between the Airline 
Consortium and Transportation Media, Inc. and that the 
Airport is not a party to that license agreement. With 
regard to the Airport's ability to receive revenues from the 
loading bridge advertising program without first 
obtaining Board of Supervisors approval, Ms. Mara 
Rosales and Ms. Adrienne Go of the City Attorney's Office 
state that the Airport's legal authority to receive such 
revenues stems from the Airport's Lease and Use 
Agreements with the airlines, which were previously 
approved by the Board of Supervisors in 1981. According 
to Ms. Rosales and Ms. Go, under these Lease and Use 
Agreements, the Airport Director has the authority to 
consent to variations to the prescribed uses of the Airport 
space leased by the airlines. Therefore, Ms. Rosales and 
Ms. Go state that, as a condition to granting his consent 
to such advertising, the Airport Director required the 
Airline Consortium to share a negotiated percentage of 
the resulting revenues with the Airport. In requiring a 
share of the advertising revenues in return for allowing 
the Airline Consortium to advertise on the loading 
bridges, the Airport Director has acted within the scope of 
the Lease and Use Agreements previously approved by 
the Board of Supervisors. Therefore, Ms. Rosales and Ms. 
Go state that the loading bridge advertising revenues of 
at least $2,887,500 to be received by the Airport directly 
from the Airline Consortium do not require separate 
Board of Supervisors approval. 

8. Mr. Quinn states that United Airlines gave 
Transportation Media, Inc. notice to proceed with 
installing the first advertising on its loading bridges from 
January 18, 2001. The Airport will receive 35 percent of 
the gross revenues from this advertising. Such revenue 
will not contribute toward the Minimum Annual 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 



Guarantee because the hcensing agreements between 
each airline and Transportation Media, Inc. have not yet 
been signed. Payment of the Minimum Annual 
Guarantee will commence once those hcensing 
agreements have been signed, according to Mr. Quinn. 

Comparison Between the Airport's Proposed Lease 
with Transportation Media, Inc. and the Airline 
Consortium's License Agreement with 
Transportation Media, Inc. 

9. On the basis of a detailed comparison between the 
license agreement between the Airline Consortium and 
Transportation Media, Inc. and the subject proposed lease 
between the Airport and Transportation Media, Inc., the 
Budget Analyst concludes that the economic provisions 
contained in each of the two contracts are fundamentally 
comparable and result in reasonable revenues being paid 
to the Airport. Under the hcensing agreement between 
the Airline Consortium and Transportation Media, Inc. 
and the proposed subject lease between the Airport and 
Transportation Media, Inc., the Airport would receive 
total additional revenues of at least $6,937,500 annually 
under the combined Minimum Annual Guarantees. As 
previously noted, the Airport Director can terminate the 
license agreement between the Airline Consortium and 
Transportation Media, Inc. upon 30 days written notice, 
at which time each airline would be required to cease all 
advertising on its loading bridges and remove the 
advertising panels. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



c JAN.04'2001 15:55 650 794 4519 



CONCESSION DEV S MGMT 



Attachment I 



SFO 



San Francisco International Airport 



MEMORANDUM 



P.O.Box 8097 
San Francisco. CA 9412S 
Tei 6S0. 821.5000 
Fax 6S0. 321.5005 

www.flyjfo.com 



AIRPORT 
COMMISSION 

CUT ANQ COUNTY 
OtSAN FRANCISCO 

wau< L. jrown, jr. 



TO: Alan Gibson 

Budget Analyst * 

FROM: Bob Rhoades v °^ 

Deputy Airport Director 
Business Division 



SUBJECT: Request for Proposal Response 



DATE: January 4, 2001 



HENRY E.BERMAN 



LARRY MAZZOLA 
Via MtSIOIHT 

MICHAEL S. STRUNSKY 

LINDAS. CRAYTON 



JOHN I.MARTIN 

aiwort oiacaon 



This is in response to your email dated January 3, 2001, regarding "further information 
request". This memorandum is addressing question no. 2, pertaining to Transportation 
Media, Inc., being the sole response to the Airport Advertising Request for Proposal. 

On June 28, 2000, the Airport conducted a pre-proposal conference for the Airport 
Advertising Program. Through Concession Development and Management's outreach, 
twenty- five companies were identified through a national search and were issued the pre- 
proposal document. 

Seven advertising companies responded and attended the pre-proposal informational 
conference (a list of the companies have been emailed to you). Transportation Media, 
Inc. was the only company to respond and to participate in the proposal process of the 
Airport Advertising Program. 

Separately, Transportation Media, Inc. and JCDecaux/SkySites participated in a separate 
request for proposal issued and awarded (on behalf of the airlines) the loading bridge 
advertising program. Transportation Media, Inc., being the successful proposer, was 
awarded with this operating agreement. 



cc: Patrick Quinn 

Concession Development and Management 



J ' ' "JAN. 04-2001 15:55 650 794 4519 



CONCESSION DEV I HGMT 



.Attachment ] 




San Francisco International Airport 



MEMORANDUM 



P.O. Box 8097 

5«n Frand>co.CA >«12fl 

Tel 650. 821.SOOO 

Fax 650.821.5005 

www.flyjfo.com 



airport 

{ommiiiiod 

city aho county 

or :an francisco 

HlhUI L. BROWN. JR. 

HArOK 

HINRY 6- 1CRMAN 
'RC5IDCHT 

LARRY MAZZOIA 
VICC PRCSIDIHT 

MICHAtlS. 3TRUN5KY 

I.INOA S.CRAYTON 



JOHN L MARTIN 
AlKPOKT DlRtCTO* 



TO: Alan Gibson DATE: January 4, 200 1 

Budget Analyst 

FROM: Bob Rhoades 

Deputy Airport Director 
Business Division 

SUBJECT; Loading Bridges 

In response to your email dated January 3, 2001, regarding "further information request", 
this memorandum is addressing question no.3, pertaining to the legal authority the 
airlines control the loading bridge advertising space and revenues. 

In February 2000, the Airport amended its long standing position on commercial 
advertising in certain non-terminal areas. One of the areas the airport expanded included 
the airline-owned loading bridges in the domestic terminals. In order to allow the airlines 
to commercially advertise in their loading bridges, the airport made an agreement with 
the airlines that all revenues would be split in half between the Airport and the airlines. 
In return, the Airport provided the airlines the same opportunity with the loading bridges 
in the international terminal, which the Airport owns. 

AvAirPros conducted a Request for Proposal (RFP) for the loading bridges on behalf of 
the airlines to facilitate the RFP process. The contract had three proposers: 
Transportation Media, Inc., A Division of Eller Media; JCDecaux - SkySites; and 
InPlaneView. Transportation Media, Inc. was awarded the contract based on their 
proposal. 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 

Item 2 - File 00-2187 

Note: This item was continued by the Finance and Labor Committee at its 
meeting of January 17, 2001. 



Department: 
Item: 



Contract Term: 



Description: 



Department of Public Health (DPH) 

Resolution authorizing the Director of Public Health and 
the Purchaser to execute a contract between the City and 
County of San Francisco and Health Advocates, LLP to 
provide uncompensated care recovery services. 

March 1, 2001 through December 31, 2002 (approximately 
22 months). 

Uncompensated care recovery services include the 
assistance to complete Supplemental Security Income 
(SSI) and Medi-Cal eligibility applications on behalf of 
DPH patients, and representation and legal assistance for 
patients in SSI fair hearings and appeals, for the purpose 
of collecting unpaid inpatient hospital bills for DPH 
services that are provided to indigent patients. The 
proposed resolution would authorize DPH to enter into a 
contract with Health Advocates, LLP (HA), a private 
contractor, to provide an uncompensated care recovery 
program. 

The DPH issued a Request for Proposals (RFP) in 
September of 2000, and received the following two bids in 
response to its RFP: (1) Health Advocates, LLP for 
$1,180,000 each contract year and, (2) Paralign for 
$1,090,000 each contract year. Attachment I, provided by 
Ms. Monique Zmuda from the DPH, indicates that the bid 
amounts were based on estimated annual revenue of 
$6,000,000, which has since been reduced to $5,800,000. 
Ms. Zmuda further advises in Attachment I that HA 
reduced its bid by $90,000 to $1,090,000 each contract 
year, the same amount bid by Paralign, after negotiations 
with the DPH. According to Ms. Zmuda, HA was selected 
based on the DPH's evaluation of the established criteria, 
which awards points based on recent relevant experience, 
the scope of work to be performed, the quality of past 
projects and cost. Ms. Zmuda states that the DPH also 
required the bidder to provide these services by multi- 
lingual and multi-cultural staff. Ms. Zmuda further 
states that the DPH also built in additional services into 
the scope of work, including following up on treatment 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 



authorization requests, and incurring the cost of re-billing 
for services provided, once the clients have been made 
eligible for Medi-Cal. 

According to Ms. Zmuda, the DPH has contracted out 
uncompensated care recovery services since 1988 to help 
supplement in-house efforts on uncompensated care 
recovery services. Ms. Zmuda advises that San Francisco 
General Hospital (SFGH) has an internal staff of ten 
Hospital Eligibility Workers to assist SFGH patients in 
identifying financial resources to pay for inpatient 
hospitalization for which no source of funding is currently 
available. Eligibility determination, which is provided by 
DPH personnel, and authorized by the City's Department 
of Human Services, typically includes assistance in 
applying for Medi-Cal or SSI, and making appropriate 
third-party claims. The contractor will handle those cases 
which the internal DPH eligibility workers have deemed 
"unreimburseable," usually involving former inpatients 
who have been discharged form SFGH. These 
uncompensated care services include identifying financial 
resources to pay for the care provided, field work on 
behalf of indigent patients, such as visits to homeless 
shelters; assistance in obtaining further medical 
treatments or evaluations, as necessary; efforts to locate 
former inpatients whose addresses are not known, and 
patient advocacy and representation in appealing denials 
of benefits to administrative agencies. 

Based on a prior year actual recovery from contracting 
this service, Ms. Zmuda advises that the DPH was paid 
approximately $5,800,000 a year, or approximately 
$483,333 a month from making indigent patients eligible 
for third-party payment. The DPH anticipates the same 
level of annual reimbursement to be made under the 
proposed contract period. 

The proposed subject contract would only pay the 
contractor a percentage of the revenues actually collected, 
on behalf of the City, according to the following schedule: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 

Cumulative Revenues Generated Contingency Fees 

Each Contract Year Paid to the Contractor 

$0 to$ 1,999,999 NET 20 percent 

$2 million to$2,999,999 NET 18 percent 

$3 million and above NET 16 percent 

"NET' is used to describe the actual cash received by 
SFGH as opposed to any unique program determinations 
of allowable amounts and the deduction of contractual 
allowances. In accordance with the contract provisions, 
HA would be paid a varying fee by the DPH based on the 
percentage of the revenues collected by the contractor. 

Comments: 1. As indicated above, the proposed contract would 

extend for the 22-month period from March 1, 2001 
through December 31, 2002. According to Ms. Zmuda, 
DPH expects to realize approximately $10,633,333 in 
additional revenues under this 22-month contract, with 
the contractor to be paid an estimated $1,884,667, or an 
overall average of 17.72 percent of the revenue collected, 
for net estimated revenues to the City of $8,748,667 for 
the term of the 22-month contract. Attachment II, 
provided by DPH, highlights the estimated revenue and 
contingency fees associated with the subject contract 
agreement. As mentioned above, the actual contingency 
fees paid to HA will depend on the revenue realized 
during the contract period. 

2. The proposed subject resolution authorizes the 
Director of Public Health and the Purchaser to make 
amendments to the subject contract, if needed. According 
to Ms. Zmuda, this is a standard provision in all of the 
DPH's contracts, which allows the DPH to make minor 
changes, such as including an additional scope of work 
requirement or extending a contract for a few months 
while an RFP is in process, but not change the intent of 
the original contract. 

3. At the Finance and Labor Committee Meeting of 
January 17, 2001, the Committee requested that the DPH 
provide, (a) additional facts pertaining to a protest made 
by Paralign, the existing contractor, and (b) the results of 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 

the Human Rights Commission evaluation of the DPH 
Request for Proposal Process (RFP), including why the 
contract was awarded to a vendor that was not the lowest 
bid. Ms. Zmuda states that Paralign appealed the DPH 
contract award to Health Advocates and claimed that the 
bid evaluation process was flawed. Ms. Zmuda states that 
Paralign's claim that the process was flawed was based on 
the participation of the Program Manager in the bid 
evaluation process. Ms. Zmuda states that it is DPH 
policy to include the Program Manager in the evaluation 
of bids in order to provide technical assistance to the 
evaluation panel. Ms. Zmuda advises that the Paralign 
appeal was denied based on the finding that the DPH 
followed its policy and that there was no irregularity in 
the process. 

According to Ms. Zmuda, the Human Rights Commission 
has not yet completed its written report for the Finance 
and Labor Committee on its evaluation of the DPH RFP 
process. Therefore, Ms. Zmuda requests that this item be 
continued for one week. 

Recommendation: Continue the proposed resolution for one week as 

requested by the Department of Public Health. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



DEC-20-2000 14:18 FROM DPH-CFO 



City and County of San Francisco 




Date: 
Memo To: 

From: 

Re: 



TO HARUEYROSE Attachment I 

Department of Public Health 

Mitchell H. Katz, M.D. 
Director of Health 



December 20, 2000 

Harvey Rose 
Budget Analyst 

Monique Zmuda 
Chief Financial Officer 

Proposed Contract with Health Advocates, LLP 



This memo is in response to questions regarding the proposed contract with Health 
Advocates LLP, to provide uncompensated care recovery reimbursement services for the 
Community Health Network of the Department of Public Health. 

The following summarizes the RFP Process: 



Date RFP Issued: 
Selection M ade ; 



September 29, 2000 
November 21, 2000 



Number of Bidders: 2- Bom profit-making private firms 

Bid Amounts: Both firms were requested to bid on services for revenue recovery of $6 
million annually. Although the bid from Health Advocates was 590,000 higher than the 
other qualified bidder, Health Advocates had a higher score, and thus was awarded the 
contract In contract negotiations with Health Advocates, the Department was successful 
in securing a reduction equivalent to $90,000 in the contract rate for the services. 



(415) 554-2600 



101 Grove Street 



Fllmvni and Paih 

San Francisco, CA 94102 



DEC-20-2000 i4:ia FROM DPH-CFO 



TO HflRUEY ROSE 



Attachment II 



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Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 

Item 3 - File 01-0053 



Department: 



Item: 



Department of Public Health (DPH) 
Department of Administrative Services (DAS) - 
Real Estate Division (RED) 

Resolution authorizing and approving a new lease 
between the City and County of San Francisco, for the 
Department of Public Health, as Lessee, and Seto Family 
Trust, as Lessor, for space located at 1421 Broderick 
Street. 



Location: 
Purpose of Lease: 

Lessor: 
Lessee: 



1421 Broderick Street 

Residential care facility for approximately 34 individuals 
who need 24-hour care and supervision. 

Seto Family Trust 

The City and County of San Francisco on behalf of the 
DPH. 



No. ofSq. Ft. and 
Cost Per Month: 



Annual Cost: 



The approximate 12,417 square feet of rentable square 
area at a monthly rental rate of $10,000 per month 
(approximately $0.81 per square foot per month). On an 
annual basis, rent would total $120,000 (approximately 
$9.66 per square foot per year) during Year One of the 
subject lease. Under the subject lease agreement, on each 
anniversary of the 10 year lease, the rental rate would 
increase by the percentage increase in the Consumer 
Price Index (CPI) for the San Francisco Metropolitan 
Area, provided that the percentage increase shall not be 
less 2 percent or more than 6 percent. 

$120,000 in Year One of the subject lease agreement. 
Annual rental costs in subsequent years would be subject 
to the annual rent adjustment formula as explained 
above. 



Utilities and 
Janitorial Service: 



Provided by a DPH contractor at an estimated annual 
cost to DPH of $122,000. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 



Term of Lease: 



Right of Renewal: 



Source of Funds: 



Description: 



Approximately ten years, upon approval of subject lease 
by the Board of Supervisors to January 31, 2011. 

One option to extend the lease for an additional ten years 
with the terms and conditions of the lease subject to 
negotiations between the City and the Landlord. If the 
City chooses to exercise the option, the City must give 
written notice to the Landlord no later than 120 days 
prior to the expiration of the initial term. All such 
renewals are subject to appropriation approval of the 
Board of Supervisors. 

According to Mr. Marc Trotz from the DPH, 
approximately $458,434 in General Fund monies has 
been budgeted in FY 2000-2001 for the start-up and 
operation costs, including rent, utilities, janitorial 
services and contractual services for the residential care 
facility to be located at 1421 Broderick Street. In future 
years, Mr. Trotz advises that the rent, and other 
operating costs associated with the proposed residential 
care facility would be funded from (1) the annual DPH 
General Fund monies budgeted for housing services 
(estimated at $844,000 for FY 2001-2002), (2) revenue 
budgeted from Medi-Cal reimbursement (estimated at 
$156,000 for FY 2001-2002), and (3) budgeted revenue 
from Supplemental Security Income reimbursement for 
patient services (estimated at $200,000 for FY 2001-2002) 
for total estimated costs of $1,200,000. The lease contains 
standard language stating that it will be terminated in 
180 days in the event of non-appropriation of funds by the 
Board of Supervisors. 

The subject master lease would permit the DPH to lease 
12,417 square feet of 1421 Broderick Street for 
approximately ten years in order to operate the Broderick 
Street Residential Care Facility to provide residential 
care for approximately 34 individuals who need 24-hour 
care and supervision. According to Mr. Trotz, the 
proposed Broderick Street Residential Care Facility would 
serve (a) individuals who are cognitively impaired and/or 
mentally ill; (b) individuals with mobility impairments 
and medical conditions who need 24-hour care; and, (c) 
individuals with primary medical conditions, including 
HIV/AIDS clients. Mr. Trotz states that the DPH will 
particularly target individuals who are currently in the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 

DPH system in need of such care. According to Mr. Trotz, 
the proposed facility would be operated through a new 
contract with the Page Street Guest House, a nonprofit 
organization (see Comment 2). 

Comments: 1. The Seto Family Trust operated a Skilled Nursing 

Home until July of 2000 at 1421 Broderick Street. 
According to Mr. Trotz, there are 16 shared bedrooms and 
2 private bedrooms, 12 bathrooms for resident use, 
sufficient office space, a staff lunge, an activities room, a 
dining room, a full kitchen and a small parking area. 
Mr. Trotz states that the DPH proposes to lease the entire 
building, including all of the furniture, fixtures and 
equipment (see Comment 6). According to Mr. Trotz, the 
subject building is in excellent condition with new boilers, 
security and alarm systems, is ADA (Americans with 
Disabilities Act) compliant and has a commercial grade 
kitchen. Mr. Trotz advises that there are no scheduled 
improvements for the residential care facility given its 
current excellent condition and configuration for use as a 
skilled nursing facility. DPH clients would move into 
1421 Broderick Street as soon as (1) the subject lease is 
approved by the Board of Supervisors, (2) the Health 
Commission approves the residential care service contract 
for the residential care facility (see Comment 3 below) 
and (3) the State of California issues the appropriate 
license to operate the facility. 

2. Mr. Trotz advises that the DPH plans to enter into a 
contract with a nonprofit agency, Page Street Guest 
House, at an estimated annual cost of $1,080,000 (See 
Comment 4) for the following services: 

• Medication monitoring, medical support, psychosocial 
services, substance abuse treatment, housekeeping, 
meals, and transportation to doctor appointments. 

• Professional property management, which would 
include program fee collection, accounts payable 
maintenance, janitorial and security services and 
other provisions needed to maintain a clean, safe and 
healthy environment 

Mr. Trotz advises that approximately 24 of the estimated 
34 patients will be SSI eligible and DPH would be 
reimbursed at $750/month each ($9,000 annually per 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 

patient) and the remaining approximately 10 patients 
would be funded from the DPH General Fund monies. 
The fees for services to be reimbursed by SSI funds are 
estimated to be between $200,000 to $216,000 per year 
($9,000 x 24 patients). Mr. Trotz states that Medi-Cal 
reimbursements are generated through specific medical 
and psychiatric services provided on site. Mr. Trotz 
estimates the annual Medi-Cal reimbursements would be 
approximately $156,000 for FY 2001-2002. 

3. The contract was awarded to Page Street Guest House, 
a nonprofit organization, to provide the services 
mentioned in Comment 2 above, at the residential care 
facility based on a Request for Qualifications Process. 
Page Street Guest House will subcontract with Richmond 
Area MultiServices (RAMS) in the amount of $140,000 to 
provide psychosocial services, counseling, mental health 
services and activities coordination. Mr. Trotz advises 
that in the Request for Qualification Process, the DPH 
received two proposals, one from Page Street Guest House 
at a cost of $1,555,000 and another from the Chun and 
Carter Residential Care Facility for $556,000. Mr. Trotz 
notes that the Chun and Carter Residential Care 
Facility's proposal was incomplete and did not meet all 
service requirements specified in the Request for 
Qualifications. Mr. Trotz further advises that the DPH 
has not previously contracted with Page Street Guest 
House, but notes that Page Street Guest House has 
operated a residential care facility on Page Street in San 
Francisco for approximately 20 to 30 years. Mr. Trotz 
advises that a technical review panel consisting of the 
DPH staff and community members determined that Page 
Street Guest House had the appropriate qualifications 
and experience to run the residential care program at 
1421 Broderick Street. According to Mr. Trotz, the DPH 
is currently negotiating the specifics of the annual costs of 
the contract with Page Street Guest House and should 
bring the contract before the Health Commission in 
February. 

4. According to Mr. Trotz, the estimated final negotiated 
contract costs with the Page Street Guest House would be 
in the amount of $1,080,000 per year instead of the 
previously proposed $1,555,000 per year. Of the estimated 
annual costs of $1,080,000 approximately $765,600 would 
be expended on staffing costs, and approximately 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 



$314,400 would be expended on operational costs, 
staffing costs are as follows: 



The 



Expenditure Item 


Estimated Cost 


Program Director (1 FTE) 


$50,000 


Medical Director (0.2 FTE) 


25,000 


Activities Coordinator 


35,000 


Social Worker (1 FTE) 


45,000 


Case Managers (2 FTE) 


70,000 


Nurse (2 FTE) 


60,000 


Cook (2 FTE) 


60,000 


Dishwasher (1 FTE) 


30,000 


Janitor/Maintenance (2 FTE) 


52,000 


Receptionist (4.2 FTE) 


126,000 


Housekeepers (3 FTE) 


85,000 


Benefits (20%) 


127,600 


TOTAL 


$765,600 



According to Mr. Trotz, the staffing costs above include 
personnel funded under the RAMS subcontract costs. The 
RAMS subcontract is for approximately $140,000 which 
includes the cost of 1 FTE Social Worker, 1 FTE Case 
Manager and 1 FTE Program/Activities Coordinator plus 
their benefits. 

Mr. Trotz estimates the annual operational costs would be 
$314,400 as follows: 



Expenditure Item 


Estimated Cost 


Property Taxes 


$8,000 


Insurance 


10,000 


Maintenance Services/Repairs 


50,000 


Supplies (including food) 


100,000 


Equipment, printing, post 


56,400 


Laundry 


10,000 


Utilities 


70,000 


Program Expenses 


10,000 


TOTAL 


$314,400 



Mr. Trotz states that these cost estimates were based on 
(a) the operating costs incurred by the Seto Family Trust 
while operating a Skilled Nursing Facility at 1421 
Broderick Street; and, (b) estimates from Page Street 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 



Guest House on operation costs for residential care 
facilities. 

5. According to Mr. Trotz, the total estimated costs and 
revenue sources for the residential care facility for FY 
2000-2001 and for FY 2001-2002 would be as follows: 

Costs: 

FY 2000-2001 FY 2001-2002 

Annual Rent $50,000* $120,000 

Service Contract 127,600 765,600 

Operations 130,834 314,400 

Start-up Costs 150.000 

Total $458,434 $1,200,000 

* 5 months from February 1, 2001 through June 30, 2001. 

Revenue Sources: 



DPH General Fund 
SSI Reimbursements 
Medi-Cal 


FY 2000-2001 
$458,434 




FY 2001-2002 
$844,000 
200,000 
156.000 


Total 


$458,434 


$1,200,000 



Mr. Trotz states that the DPH did not specifically budget 
revenue from SSI and Medi-Cal for FY 2000-2001 because 
the DPH was unsure exactly how many patients would be 
at the residential care facility by the end of FY 2000-2001. 
Therefore, any SSI and/or Medi-Cal reimbursements 
received would be additional revenue to the DPH for FY 
2000-2001, enabling the DPH to reduce its net General 
Fund support. 

As noted in the table above, Mr. Trotz estimates that the 
annual total costs would be approximately $1,200,000. 
Therefore, the unit costs per patient per year would be 
approximately $35,294 ($1,200,000 + 34 patients) and the 
cost per patient per day would be approximately $97 
($35,294 h- 365 days in a year). 

Clients for the proposed residential care facility at 1421 
Broderick Street would be transferred from DPH referral 
points including San Francisco General Hospital, Laguna 
Honda Hospital and the City's Mental Health 
Rehabilitation Facility. Mr. Trotz states that it costs 
between $250 and $800 per day per person to care for 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

January 31, 2001 Finance Committee Meeting 

patients in the above-mentioned DPH facilities, compared 
to the daily per person cost of approximately $97 for the 
Broderick Street facility. Moving such patients to the 
residential care facility at 1421 Broderick allows the DPH 
to provide a more appropriate level of care for those 
individuals who would otherwise get more expensive care 
at Laguna Honda Hospital and San Francisco General 
Hospital. Doing so would make beds available at Laguna 
Honda Hospital and San Francisco General Hospital for 
patients who need a higher level of care. Any potential 
savings to be achieved under the proposed program such 
as through expenditure reductions at Laguna Honda 
Hospital and San Francisco General Hospital will be 
subject to future budget policy decisions. 

6. Mr. Trotz advises that the furniture, fixtures and 
equipment are being provided by the Lessor at an 
estimated value of approximately $50,000. 

7. Mr. Trotz states that the proposed lease agreement 
contains a termination clause (Section 3.5) which permits 
the City to terminate the lease for any reason upon 180 
days prior written notice. This would permit the City to 
terminate the lease in six months in the event of non- 
appropriation of the necessary funding by the Board of 
Supervisors. 

8. Ms. Jean Medlar from the Real Estate Division reports 
that the proposed rental rate of $0.81 per square foot per 
month represents fair market value. 

9. Page two, line five of the proposed resolution 
incorrectly states that the base rent is $0.67 per square 
foot per month when it should state that the base rent is 
$0.81 per square foot per month. Therefore, the proposed 
resolution should be amended to revise the base rent 
amount to $0.81 per square foot per month. 

Recommendations: 1. Amend the proposed resolution to correct an error on 

page two, line five, of the proposed resolution, which 
states, "Base Rent - $0.67 per square foot per month" to 
read, "Base Rent - $0.81 per square foot per month," in 
accordance with Comment 9 above. 

2. Approve the proposed resolution, as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 

Item 4 -File 01-0104 



Department: 



Item: 



Human Resources Department (HRD) 
Fire Department 

Resolution authorizing settlement of the grievance filed 
by Glenn Alston and the International Federation of 
Professional and Technical Engineers, Local 21, AFL-CIO 
("Local 21"), on behalf of 16 civilian Classification 6281 
Fire Safety Inspectors in the Fire Department pursuant 
to the Memoranda of Understand between Local 21 and 
the City and County of San Francisco, in the aggregate 
amount of $80,080.48. 



Settlement Amount: $81,625.52 (see Comment No. 1 below) 



Source of Funds: 



Description: 



According to Ms. Pamela Levin of the Office of the 
Controller, the grievance settlement monies would be 
funded from the Fire Department's existing FY 2000-01 
budget. 

The proposed resolution would authorize the Human 
Resources Director to settle a grievance filed by Mr. 
Glenn Alston and Local 21 against the City. Mr. Alston is 
a Fire Department employee in the civilian Classification 
6281 Fire Safety Inspector. This grievance was filed by 
Mr. Alston and Local 21 on behalf of the 16 civilian 
Classification 6281 Fire Safety Inspectors in the Fire 
Department who did not receive additional specialized 
training to perform "life-safety testing", or fire alarm 
testing required by the Department of Building 
Inspection, which had been received by uniformed H-4 
Inspectors in the Fire Department. As a result of 
receiving such specialized training, the uniformed H-4 
Inspectors were eligible to work additional overtime 
hours. 



According to the grievance filed by Local 21, the 16 
employees alleged that the Fire Department violated 
Section 123(a) of the three-year Memorandum of 
Understanding (MOU) between the City and Local 21 
previously approved by the Board of Supervisors for 
Fiscal Years 1998-99 through 2000-01. The basis for the 
Local 21 grievance is that by not providing civilian 6281 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 

Fire Safety Inspectors with the opportunity to receive the 
same additional specialized training given to uniformed 
H-4 Inspectors, the Fire Department effectively denied 
the civilian 6281 Fire Safety Inspectors the opportunity to 
work on an overtime basis and to receive such overtime 
pay in an amount equivalent to the uniformed H-4 
Inspectors. 

According to Ms. Alice Villagomez of HRD, since Section 
123(a) of the previously approved MOU states that the 
civilian 6281 Fire Safety Inspectors shall receive parity 
for overtime with the uniformed H-4 Inspectors, the 
grievance claim is justified. 

The grievance proceeded to arbitration in April of 2000 
but the Arbitrator recommended that the City and Local 
21 negotiate a settlement in lieu of a third party award 
determined by the Arbitrator. The resulting settlement 
negotiated between the City and Local 21 would, if 
approved by the Board of Supervisors, authorize the City 
to pay overtime wages retroactive for the approximately 
21.5 month period from July 1, 1998 through April 19, 
2000 in the total amount of $81,625.52, as follows: 

• $5,115.39 for each of 14 employees who filed the 
grievance, for a total of $71,615.46. 

• $5,005.03 for each of two employees 1 who filed the 
grievance, for a total of $10,010.06. 

The calculation of the above amounts is based on the 
information contained in the Attachment provided by 
HRD. Mr. Gran states that the July 1, 1998 date is based 
on the filing date of the grievance 2 , and the April 19, 2000 
date is based on the arbitration hearing date. 

Comments: 1. In reviewing the calculations for the proposed 

settlement amount, the Budget Analyst found that the 
total amount had been understated by $1,545.05, 
resulting in a correct total settlement payable by the City 



1 According to Ms. Mary Hao of HRD, two of the 16 civilian 6281 Fire Safety Inspectors received a 
slightly lower amount because they did not qualify for the longevity and educational bonuses for 
which the other 14 employees were qualified to receive. 

2 Mr. Gran advises that the grievance was filed on July 28, 1998, but that under the MOU, the claim 
can extend retrospectively for up to 20 working days prior to the date that the claim is actually filed. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 

of $81,625.52, instead of the amount of $80,080.48 as 
contained in the proposed resolution. Mr. Martin Gran of 
the City Attorney's Office concurs with the Budget 
Analyst's calculation. 

2. Mr. Gran concurs with Ms. Villagomez's statement 
that the proposed settlement agreement is justified 
because the MOU, as previously approved by the Board of 
Supervisors, provides for parity in overtime between the 
civilian 6281 Fire Safety Inspectors and the uniformed H- 
4 Inspectors. Furthermore, Mr. Gran advises that the 
City prefers the narrowly tailored negotiated settlement 
to a final and binding third party award, as would have 
been issued by the Arbitrator if the parties had failed to 
negotiate the proposed settlement agreement, because (a) 
such an award could potentially affect other wage and 
benefits issues beyond the specific life-safety testing 
training parity issue, raised in the grievance, and (b) the 
City would have been required to accept the Arbitrator's 
award amount which could have been greater than the 
proposed settlement amount. 

3. According to Ms. Mary Hao of HRD, as required by the 
proposed settlement agreement, the Fire Department has 
trained all 16 civilian 6281 Fire Safety Inspectors in fire 
alarm testing and now all 16 employees are certified to 
work on fire alarm testing required by the Department of 
Building Inspection, and are therefore eligible to receive 
pay for future overtime work on such responsibilities. 

4. Under the proposed settlement agreement, the 16 
civilian employees would expressly waive any right to 
recover any of their legal expenses. 

Recommendations: 1. Increase the aggregate amount of $80,080.48, as 

contained in the proposed resolution, by $1,545.05 to 
$81,625.52 to reflect the correct settlement amount 
calculation, in accordance with Comment No. 1 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

January 31, 2001 Finance and Labor Committee Meeting 




[arvey M. Rose 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



JAN 25*01 10:50 FR 



City "and County of San Francisco 



December 1 1 , 2000 



To: 



415 55? 4919 



Attachment 
i"age 1 of" 2 




Department of Human Resources 



ANDREA R. GOURDINE 
HUMAN RESOURCES DIRECTOR 



Andrea Gourdine 

Director, Departmentof Human Resources 



lan 



Geoff Rothrh 
Director, Enploye 
Department 



From: 



RE: 



e Relations Division 
of Human Resources 



MaryHaoT^FV 
Employee Rfflago^Representative 



Glenn Alston, et a/ (Fire Safety Inspectors) Grievance 
ERD Reference No. 31-99-0326 



Attached for your signature is the Settlement Agreement for the above-referenced 
matter. 

This grievance dealt with overtime parity as provided in Local 21 MOU Section 123(a). 
Pursuant to this section, the Class 6281 Fire Safety Inspectors (represented by Local 
21) are guaranteed overtime parity with the H-4 Inspector class (represented by Local 
798), except to the extent that overtime assignments require fire suppression skills that 
the Class 6281 Fire Safety Inspectors do not have. Fire Safety Inspectors are not 
sworn, uniformed personnel, as they have not have gone through the fire academy like 
the H-4s; however, the life safety testing overtime assignment does not require any fire 
suppression skills and yet the Fire Safety Inspectors were denied this overtime 
assignment for many years. This grievance was filed over two years ago, and therefore 
back pay goes back foil that time. The class of grievants affected was sixteen (16) 
Class 6281 Fire Safety Inspectors. 



During the April 19, 2000 arbitration hearing, the parties agreed to settle this matter. 
The Union and the Department agreed that the Department would pay the sixteen (16) 
Class 6281 Fire Safety Inspectors 38% 1 of the total life safety overtime assignments (in 
hours) earned by the H-p classification between July 1, 1998 and April 19, 2000. Once 
the 38% figure was applied, the overtime rate applicable to the Fire Safety Inspectors 
was then computed. The total value of the Fire Safety Inspectors overtime rate times 



1 38% represents the percentage that fire safety inspectors are of the total number of uniformed and 
civilian inspectors. Class 62^1 Fire Safety Inspectors actually represent 42% of the total number of 
uniformed and civilian inspectors; however after further discussions, the parties agreed to use 38% 
instead. 



44 Gough Street • San Francisco. CA 94101-1213 



JRN 25'01 10:50 FR 

Andrea Gourdine 
Geoff Rothman 
December 1 1 , 2000 
Page 2 



their 38% of the total 
among the sixteen 
lesser amount because 
(3% of overtime.) To 



415 557 4919 TG 



Attachment 
£age 2 ot 2 



Life Safety overtime hours worked was then distributed equally 
ffectud inspectors. Two of the sixteen inspectors received a slightly 
tiey did not qualify for the longevity and the educational bonus 
, the formula used is as follows: 



recap 

"Total number of Life Safety overtime hours between July 1, 1998 and April 19, 2000 

Times 

38% (the percentage that Fire Safety Inspectors are of the total number of uniformed 

and civilian inspectors) 

Times 

overt me rate applicable to Fire Safety Inspectors 

Divided by 

16" 



Then Chief of 
approved of this calculat 



Department Demmons and Bureau of Fire Inspection Chief Massetani 
on. The total cost of this settlement is $81 ,625.52. 



Please do not hesitate to 
your prompt attention to 



contact me at x4981 if you have any questions. Thank you for 
this matter. 



\\OHR-MlS-0iSVR\DATA\SHARE\4RO\GrievancesWston s«Demenc memo.doc 




Main Library 



[All Committees] 
City and County of £an Francisco Government Document Section 
Meeting Minutes 
Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: Gail Johnson 



lO ) Wednesday, February 07, 2001 



10:00 AM 

Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 



002053 



The meeting convened at 10:06 a.m. 



DOCUMENTS DEPT. 

FEB 1 h 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



[Golden Gate/Neighborhood Park Bond Award] 
Supervisor Newsom 

Motion awarding Bonds and fixing definitive interest rates for $17,060,000 General Obligation Bonds (Golden 

Gate Park Improvements, 1992) and Series 2000E; $14,060,000 General Obligation Bonds (Neighborhood 

Recreation and Park Facilities Improvement Bonds, 2000) Series 2000F. (Mayor) 

1 1/15/00, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

2/1/01 , TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Karen Ribble, Bond Associate, Mayor's Office 

of Public Finance. 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Motion awarding Bonds and fixing definitive interest rates for $17,060,000 General Obligation Bonds (Golden 

Gate Park Improvements, 1992) and Series 2001A; $14,060,000 General Obligation Bonds (Neighborhood 

Recreation and Park Facilities Improvement Bonds, 2000) Series 200 IB. (Mayor) 

AWARDED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010039 [Airport Lease Agreement Modification for United Airlines, Inc.] 

Resolution approving Lease Modification Number Three for Lease No. 73-0066 between United Airlines, Inc. 
and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 
1/2/01 , RECEIVED AND ASSIGNED to Finance and Labor Committee. 
2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore 
Lakey, Deputy City Attorney; Gary Franzella, Assistant Deputy Airport Director, Aviation Management, 
Airport. 

Continued to February 21, 2001. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:59 P.\f on 2/1 ZVl 



Finance Committee 



Meeting Minutes 



February 7, 2001 



010052 [Airport Lease Agreement for Plot 6 to United Airlines, Inc.] 

Resolution approving lease agreement for Plot 6 between United Airlines, Inc. and the City and County of San 
Francisco, acting by and through its Airport Commission. (Airport Commission) 
1/10/01, RECEIVED AND ASSIGNED to Finance and Labor Committee 
2/1/01 , TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore 
Lakey, Deputy City Attorney. 
Continued to February 2 1 , 2001. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010047 |Law Enforcement Training] 

Resolution authorizing the Chief of Police to execute an agreement with the State of California to obtain 
funding in the amount of One Hundred Three Thousand Three Hundred Fifty Eight Dollars ($103,358) for 
obtaining training equipment. (Police Department) 
1/8/01, RECEIVED AND ASSIGNED to Housing and Social Policy Committee. 
2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Lieutenant Richard Parry, Police Department. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



002187 [Contract between the Dept. of Public Health and Health Advocates, LLP to provide uncompensated 
care recovery services] 

Resolution authorizing the Director of Public Health and the Purchaser to execute a contract between the City 
and County of San Francisco and Health Advocates, LLP to provide uncompensated care recovery services. 
(Public Health Department) 

12/13/00, RECEIVED AND ASSIGNED to Public Health and Environment Committee. 

12/28/00, TRANSFERRED to Finance and Labor Committee. At the request of the President, this matter is to be scheduled for the 
January 10, 2001 meeting. 

1/17/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer, 
Department of Public Health, Steve Reid, President, Paralign; Diane Sovereign (attorney), Linda Safir, Director of Sales, Paralign, Karla 
Fine, Manager, Paralign; Fanny Mayorga, Paralign; Juan Sosa, Paralign; Helen Lim, Paralign, Robert McCarthy (registered to speak for 
Paralign); Al Leibovic, Health Advocates; Theodore Lakey, Deputy City Attorney; Edward Harrington, Controller. 
Continued to January 3 1 , 2001 . 

1/31/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer, 
Department of Public Health. 
Continued to February 7, 2001 . 
2/1/01 , TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Chief Financial Officer, 
Department of Public Health; Virginia Harmon, Interim Director, Human Rights Commission; Diana Rivera, 
Head of Patient Accounting, San Francisco General Hospital, Department of Public Health; Cheryl Bregman, 
Deputy City Attorney; Steve Reid, President, Paralign; Al Leibovic, Managing Partner, Health Advocates; 
Linda Safir, Director of Sales, Paralign; Karla Fine, Manager, Paralign; Jose Martinez, Account Director, 
Paralign; Fanny Mayorga, Supervisor, Paralign; Luvi Bone, Paralign; Beatrice Gonzalez, Paralign; Patricia 
Putynkowski, Paralign; Juan Sosa, Paralign; Rafael Arteagia, Paralign; Helen Lim, Paralign; Diane 
Sovereign, Attorney, representing Paralign; Lock Holmes, Attorney, representing Paralign; Robert McCarthy, 
representing Paralign. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:59 PM on 2/12/01 



Finance Committee 



Meeting Minutes 



February 7, 2001 



010112 [Reserved Funds, Workers' Compensation] 

Hearing to consider release of reserved workers' compensation funds (2000-2001 budget) for eight (8) 

departments - Fire, Police, Public Health, Human Services, Sheriff, Parking and Traffic, Juvenile Court, and 

Recreation and Park in the amount of $9,410,038 to cover expenditures for the remainder of the current fiscal 

year. (Human Resources Department) 

1/19/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Edward Harrington, Controller; Minh Vu, 

Deputy Director, Workers Compensation Division, Department of Human Resources. 

Release of reserved funds in the amount of $9,410,038 approved. 

APPROVED AND FILED by the following vote: 

Ayes: 2 - Leno, Peskin 

Absent: 1 - Gonzalez 



010150 [Final Negative Declaration, Jobs-Housing Linkage Ordinance] 

Resolution adopting Final Negative Declaration, finding and determining that the Jobs-Housing Linkage 
Ordinance will have no significant impact on the environment, and adopting and incorporating findings of Final 
Negative Declaration. (Planning Department) 

(Final Negative Declaration adopted and issued on April 27, 1999.) 
1/24/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Supervisor Ammiano; Harvey Rose, Budget Analyst; Gerald Green, Director 
of Planning; Marcia Rosen, Mayor's Office of Housing; Calvin Welch, Council of Community Housing; Jim 
Chappell, President, SPUR; Jose Wheelock; Theodore Lakey, Deputy City Attorney. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 2:59 PM on 2/12/01 



Finance Committee Meeting Minutes February 7, 2001 



000276 [Planning Code amendment to rename "Office Affordable Housing Production Program" as the "Jobs- 
Housing Linkage Program" and to apply the program to hotel, entertainment, and retail space 
according to square footage] 
Supervisors Ammiano, Bierman 

Ordinance amending Article III, Chapter II, Part II of the San Francisco Municipal Code (Planning Code) by 

amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5, 313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12, 

313.13, and 313.14, to rename the "Office Affordable Housing Production Program" as the "Jobs-Housing 

Linkage Program," to apply the program to all new and expanded hotel space of at least 25,000 square feet, to 

all new and expanded entertainment space of at least 25,000 square feet, to all new and expanded retail space of 

at least 25,000 square feet, and to all new and expanded research and development space of at least 25,000 

square feet; to set forth the number of housing units to be constructed for each type of development subject to 

this Ordinance; to increase the number of housing units and fees for office developments; and by adding 

Section 313.15 to require a study every five years determining the demand for housing created by commercial 

development. 

2/9/00, PREPARED IN COMMITTEE AS AN ORDINANCE. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Julian 

Low, Supervisor Katz's Aide; Gerald Green, Director of Planning, Supervisor Bierman; Supervisor Ammiano; Ted Lakey, Deputy City 

Attorney; Calvin Welch; Jim Gonzalez, Information Technology Coalition, Mane Jones, S F. Partnership, Robert McCarthy; Chns 

Moore. To be referred to City Planning for review and comments. 

2/9/00, CONTINUED TO CALL OF THE CHAIR. 2/1 5/00. Referred to City Planning Commission. 3/22/00, From City Planning, will 

not be able to hear this item until May 15. 

5/10/00, AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. Heard in Committee Speakers Supervisor 

Ammiano; Calvin Welch, Council of Community Housing; Sue Hestor; Chris Daly, Mission Agenda, Beryl Magilavy; Joyce Miller, 

Marie Jones, S. F. Partnership; Cathy Brandhorst. Referred to City Planning Commission. 

5/10/00. CONTINUED AS AMENDED. Continued to call of the chair. 

6/5/00, SUBSTITUTED. Supervisor Ammiano submitted a substitute ordinance bearing new title 

6/5/00, ASSIGNED to Finance and Labor Committee. Transmitted to Planning Commission for public hearing and recommendation. 

10/16/00, SUBSTITUTED. Supervisor Ammiano submitted a substitute ordinance bearing new title. 

Transmitted to Planning Commission for public hearing and recommendation. 

10/16/00, ASSIGNED to Finance and Labor Committee. 

2/1/01 , TRANSFERRED to Finance Committee. New Committee Structure. 

Heard in Committee. Speakers: Supervisor Ammiano; Harvey Rose, Budget Analyst; Gerald Green, Director 
of Planning; Marcia Rosen, Mayor's Office of Housing; Calvin Welch, Council of Community Housing; Jim 
Chappell, President, SPUR; Jose Wheelock; Theodore Lakey, Deputy City Attorney. 
Supervisor Ammiano presented an Amendment of the Whole containing technical amendments. 
AMENDED, AN AMENDMENT OF THE WHOLE BEARING SAME TITLE. 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 4 Printed at 2: 59 PM on 2/12/01 



Finance Committee Meeting Minutes February 7, 2001 



010149 [Jobs-Housing Linkage Program] 

Ordinance amending Article III, Chapter II, Part II of the San Francisco Municipal Code (Planning Code) by 
amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5, 313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12, 
313.13, and 313.14, to rename the "Office Affordable Housing Production Program" as the "Jobs-Housing 
Linkage Program," to apply the program to all new and expanded hotel space of at least 25,000 square feet, to 
all new and expanded entertainment space of at least 50,000 square feet, and to all other new and expanded 
retail space of at least 100,000 square feet; to set forth the number of housing units to be constructed for each 
type of development subject to this ordinance; to set forth fees for each type of development subject to this 
ordinance; to increase the number of housing units and fees for office developments; and by adding Section 
313.15, to require a study every five years determining the demand for housing created by commercial 
development. (Planning Department) 

(Planning Resolution No. 16044 adopted December 7, 2000 recommending the proposed amendment to the 

City Planning Code; Planning File No. 1999.178T.) 

(Companion measure to File 010150.) 

1/24/01, RECEIVED AND ASSIGNED to Finance Committee. Board President requests this item be calendard at the February 7, 2001 

meeting 

Heard in Committee. Speakers: Supervisor Ammiano; Harvey Rose, Budget Analyst; Gerald Green, Director 
of Planning; Marcia Rosen, Mayor's Office of Housing; Calvin Welch, Council of Community Housing; Jim 
Chappell, President, SPUR; Jose Wheelock; Theodore Lakey, Deputy City Attorney. 
TABLED by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



ADJOURNMENT 

The meeting adjourned at 1:32 p. m. 



City and County of San Francisco 5 Printed at 2:59 PM on 2/12/01 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



n 

1/7/0/ 



CITY AND COUNTY 




oFSANEKANdSfflCUMENTS DEPT. 
FEB - 6 2001 



BOARD OF SUPERVISORS 



BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



SAN FRANCISCO 
PUBLIC LIBRARY 



February 1, 2001 



TO: ^Finance Committee 

FROM: ; Budget Analyst 

SUBJECT: February 7, 2001 Finance Committee Meeting 



Item 1 - File 00-2053 

Department: 

Item: 



Description: 



Mayor's Office of Public Finance 

Motion awarding bonds and fixing definitive interest 
rates for $17,060,000 General Obligation Bonds (Golden 
Gate Park Improvements, 1992), Series 2001A; 
$14,060,000 General Obligation Bonds (Neighborhood 
Recreation and Park Facilities Improvement Bonds, 
2000), Series 2001B. 

On October 10, 2000, the Board of Supervisors approved a 
resolution authorizing and directing the sale of up to 
$17,060,000 in General Obligation Bonds (File No. 00- 
1613, Golden Gate Park Improvements, 1992) to fund the 
construction and/or reconstruction of Golden Gate Park's 
utilities and infrastructure. Additionally, on October 10, 
2000, the Board of Supervisors approved a separate 
resolution authorizing and directing the sale of up to 
$14,060,000 in additional General Obligation Bonds (File 
No. 00-1612, Neighborhood Recreation and Park Faculties 
Improvement Bonds, 2000) to provide for the acquisition, 
construction and/or reconstruction of neighborhood 
recreation and park facilities and properties. 



Memo to Finance and Labor Committee 
February 7, 2001 Finance Committee Meeting 



Comments: 



1. Ms. Karen Ribble of the Mayor's Office of Public 
Finance advises that the bids for the proposed sale of 
$31,120,000 in General Obligation bonds are scheduled to 
be opened at 8:00 a.m. on February 7, 2001. According to 
Ms. Ribble, unless all of the bids are rejected, the Finance 
Committee will be asked to award the bonds to the bidder 
whose bid represents the lowest true interest cost to the 
City. Ms. Ribble reports that the Mayor's Office of Public 
Finance will submit an Amendment of the Whole to the 
Finance Committee's scheduled meeting at 10:00 a.m. on 
February 7, 2001, which will list the winning bidder, the 
other bidders and the interest rate that each bidder 
offered to the City. Additionally, at the February 7, 2001, 
Finance Committee meeting, the Mayor's Office of Public 
Finance will provide the debt service payment schedule, 
including the bond maturity dates, principal amounts and 
interest rates. 



2. The expenditure of bond proceeds will be subject to 
appropriation approval by the Mayor and the Board of 
Supervisors. According to Ms. Ribble, a supplemental 
appropriation for expenditure of such bond proceeds is 
expected to be submitted to the Board of Supervisors in 
mid-February of 2001. 



Recommendation: 



Approve a motion awarding the subject bonds to the low 
bidder, which represents the lowest true interest cost to 
the City. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

■2 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

Item 2 -File 01-0039 



Department: 
Item: 

Lessor: 
Lessee: 
Term of Lease: 

Right of Renewal: 
Description: 



Airport 

Resolution approving Lease Modification No. 3 for Lease 
No. 73-0066 between United Airlines, Inc. and the City, 
acting by and through its Airport Commission. 

City and County of San Francisco 

United Airlines, Inc. 

The subject lease was first approved in 1973 for an initial 
20-year term, to expire in 1993, with two 10-year options at 
the discretion of the lessee. 

As noted above, the 20-year lease provided for two 10-year 
extensions at the discretion of the lessee, for a total lease 
period of up to 40 years. In 1993, United Airlines exercised 
its first 10-year extension, which is due to expire in 2003. 

On December 5, 2000 the Airport Commission approved 
Modification No. 3 of Lease 73-0066 between the Airport 
and United Airlines, Inc. Under lease 73-0066, United 
Airlines currently occupies 129.75 acres of land used by 
United Airlines for employee parking and its Maintenance 
Operations Center (MOC) for aircraft maintenance. The 
subject lease was originally approved in 1973 for an initial 
term of 20 years, with two 10-year extension options at the 
discretion of the lessee. According to Ms. Dorothy Schimke 
of the Airport, in 1993 United Airlines exercised its first 
ten-year option, which is due to expire on June 30, 2003. 
The property leased by United Airlines is located at the 
intersection of San Bruno Avenue and the Bayshore 
Freeway. 

The Airport is currently developing a Multi-Modal 
Transportation Center, which includes, among other 
elements, expansion of short-term Parking Lot DD, which 
is adjacent to the property leased by United Airlines, and 
the extension of the AirTrain (the Airport light rail system) 
to the Multi-Modal Transportation Center and Parking Lot 
DD (see Attachment, provided by the Airport, for a 
description of these projects). According to Ms. Schimke, 
Parking Lot DD currently consists of Airport employee and 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

3 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Airport tenant employee parking. Ms. Schimke advises that 
Parking Lot DD will be expanded and initially used for 
additional employee parking, and upon completion of the 
Multi-Modal Transportation Center, the expanded portion 
of Parking Lot DD would be converted for long-term public 
parking. Ms. Schimke advises that in order for the Airport 
to complete such an expansion, the Airport needs access to 
Parking Lot DD through a portion of the property currently 
leased by United Airlines. Under the proposed Modification 
No. 3 to Lease 73-0066, United Airlines has agreed to 
relinquish to the Airport 0.74 acres of property. In return, 
the Airport has agreed to provide United Airlines with 
additional space of up to 2.61 acres for employee parking, 
as discussed below. 

The proposed transfer of acreage under the subject lease 
Modification No. 3 would take place in the two following 
phases: 

(1) Ms. Schimke reports that on December 1, 2000, United 
Airlines relinquished 0.74 of its total 129.75 in leased 
property back to the Airport, leaving 129.01 acres under 
the subject lease with United Airlines (see Comment No. 
2). 

(2) In exchange for relinquishing the 0.74 acres discussed 
above, the Airport agreed to provide United with 150 
additional parking spaces for United Airlines employees 
that will be added to the lease at a future date, totaling 
a maximum of 2.61 acres. However, Ms. Schimke 
advises that the amended lease with the Airport will not 
include the additional acreage until the Airport 
completes the Multi-Modal Transportation Center and 
the AirTrain, in approximately four to six years, as 
explained in the Attachment to this report. During the 
interim period, between the time that United Airlines 
relinquished 0.74 acres of space on December 1, 2000 
and the completion of the Multi-Modal Transportation 
Center and the AirTrain Extension, the Airport has 
granted United .Airlines a month-to-month permit, 
effective December 1, 2000, for approximately 2.61 acres 
to accommodate the additional employee parking. 
Because the guideway for the AirTrain will require use 
of part of the 2.61 acres, the Airport will not be able to 
determine the exact amount of additional space that will 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Rent paid by 
United Airlines 
to the Airport: 



be added to tbe existing lease until the Multi-Modal 
Transportation Center and the AirTrain are completed. 
Therefore, proposed lease Modification No. 3 states that 
the Airport and United Airlines agree to expand the 
existing lease "after the Multi-Modal Transportation 
Center and the AirTrain Extension are completely 
designed and constructed... without the requirement of 
formal amendment to the Lease or the approval of any 
party... as to the dimensions and configuration of such 
space." 



Rent for the additional space to be charged by the Airport 
to United Airlines will be at the same rate of $35,879.50 
per acre charged for the existing lease, both when the space 
is under permit and after it is added to the lease. The rate 
of $35,879.50 first became effective in 1998, according to 
Ms. Schimke. 



Permit: 



Ms. Schimke advises that when the first 10-year lease 
extension with United Airlines was negotiated in 1993, 
United Airlines and the Airport agreed to an annual rent of 
$32,617.73 per acre for the first five years of the 10-year 
extension, with one increase of $3,261.77 to an annual rent 
of $35,879.50, effective July 1, 1998, for the remaining five 
years of the 10-year extension, expiring on June 30, 2003. 
Therefore, during the first 10-year extension between 1993 
and 2003, the rent charged to United Airlines will have 
increased by only approximately 10 percent, or by 
approximately an average of one percent per year. 

Under the proposed lease Modification No. 3, the exchange 
in space would result in a maximum net increase of 1.87 
acres used by United Airlines in this location (the 2.61 
acres in new parking for United Airlines employees, less 
the 0.74 acres relinquished back from United Airlines to 
the Airport). 

According to Ms. Schimke, the month-to-month permit 
granted to United Airlines for the 2.61 acres allows the 
Airport to modify or terminate the permit with 30-days 
notice. Ms. Schimke advises that since the Airport must use 
portions of the 2.61 acres under permit to United Airlines 
for construction of the AirTrain extension, the Airport will 



BOARD OF SUPERVISORS 
BUDGET ANALYST 
5 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Compliance with 
City Laws: 



Comments: 



reduce the number of acres provided to United Airlines 
under permit as needed. 



In addition, the proposed lease Modification No. 3 would 
update the existing lease to reflect changes to the 
Administrative Code and other City requirements, such as 
provisions requiring compliance with the ban on tropical 
hardwoods and virgin redwood, the MacBride Principles 
related to employment inequity in Northern Ireland, the 
Non-Discrimination in City Contracts and Equal Benefits 
Ordinance, and the Minimum Compensation Ordinance. 

1. As previously noted, the proposed lease modification 
would ultimately result in a maximum net increase of 1.87 
acres of space for United Airlines. The net rent increase 
that the Airport would receive annually from United 
Airlines is $67,095 per year, as shown in the table below. 
However, the increased acreage to be added to the lease 
will most likely be less than the estimated 1.87 acres since 
the parking parcel now under permit will be reduced by 
AirTrain construction as described above. Ms. Schimke 
advises that the Airport will not add more than 2.61 acres 
to the lease with United Airlines. The estimated net 
increased rent of $67,095 to be paid by United to the 
Airport is shown in the table below. The net increased rent 
applies immediately to the estimated 2.61 acres provided to 
United Airlines under a month-to-month permit effective 
December 1, 2000, as well as to the final acreage after it is 
incorporated into the existing lease. As stated previously, 
Ms. Schimke reports that the Airport expects to complete 
the Multi-Modal Transportation Center and the AirTrain 
Extension in approximately four to six years, as stated in 
the Attachment, provided by the Airport. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

6 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 





Annual Cost 
per Acre 


Total 
Acres 


Annual 
Airport Revenues 


Existing Lease 


$35,879.50 


129.75 


4,655,365 


Space relinquished by 
United Air Lines to 
the Airport 


$35,879.50 


(0.74) 


(26,550) 


Estimated additional space 
to be leased by 
United Airlines 


$35,879.50 


2.61 


93,645 


New Total 


131.62 


$4,722,460 


Net Increase 


1.87 


$67,095 



2. As stated previously, Ms. Schimke advises that on 
December 1, 2000, United Airlines relinquished 0.74 acres 
of space leased under the existing contract. In addition, the 
Airport issued to United Airlines a permit, effective 
December 1, 2000, to use an additional 2.61 acres for 
employee parking, at which point United Airlines began 
paying additional rent to the Airport based upon the 
additional 2.61 acres. Therefore, the Budget Analyst 
recommends that the subject resolution be amended to 
provide for retroactive authorization. Ms. Schimke advises 
that the permit to United for use of the 2.61 acres will be 
terminated when the space is formally incorporated into 
the existing lease. 

3. As noted above, United Airlines will be charged rent for 
the additional 2.61 acres at the same rate of $35,879.50 per 
acre charged for the existing lease both when the space is 
under permit and after it is added to the lease. Ms. 
Schimke advises that the rate of $35,879.50 first became 
effective July 1, 1998. The Budget Analyst notes that not 
only has this rent of $35,879.50 per acre not been increased 
since July 1, 1998, or for 2.5 years, but additionally, over 
the 10-year lease extension, which expires June 30, 2003, 
the rental increases to United Airlines in total have 
averaged approximately one percent per year over 10 years, 
or a total increase of $3,261.77, which adjusted the 1993 
rent of $32,617.73 per acre to the current rent of $35,879.50 
per acre. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



fid fjt> revised 2/2/01 

Item 2 - File 01-0039 
Memo to Finance Committee 
February 7, 2001 Finance Committee Meeting 

Had this rent amount been adjusted upward according to 
the total 11.24 percent increase in the Consumer Price 
Index (CPI) between July 1, 1998 and January 2001, the 
rent would have increased by $4,302.86 to an annual rent 
of $39,912.35 per acre. Furthermore, the Budget Analyst 
questions why the Airport does not require that United 
Airlines pay the Airport an adjusted rent based on current 
fair market rent for the net additional 1.87 acres to be used 
by United Airlines (the 2.61 acres in new employee parking 
for United Airlines, less the 0.74 acres relinquished back by 
United Airlines to the Airport). 

According to Ms. Schimke, the Airport agreed to the 
proposed exchange of property with United Airlines and the 
rental rate of $35,879.50 because the 0.74 acres United 
Airlines has relinquished to the Airport is critical to the 
completion of the AirTrain Extension and the Multi Modal 
Center. The Budget Analyst notes, however, that the net 
additional 1.87 acres provided to United Airlines for 
, employee parking is apparently important to United 

Airlines since United Airlines has requested the additional 
land from the Airport. Therefore, the Budget Analyst 
questions why the Airport does not require United Airlines 
to pay the current fair market value for the additional land 
that United will receive and why the rent being charged to 
United Airlines has only been increased by an average of 
one percent annually over the 10-year lease extension 
period, which expires on June 30, 2003. 

4. Ms. Schimke also states that the original 1973 lease with 
United Airlines contains no provisions for annual 
adjustments in rent during the initial 20-year term of the 
lease, or during each of the subsequent two 10-year 
extension periods. As discussed in Comment No. 3 above, 
the existing lease provides that before each of the 10-year 
extensions, the Airport and United Airlines will negotiate a 
revised rent based upon Airport appraisals of the land's fair 
market value at that time. 

5. In response to the Budget Analyst's report, Ms. Schimke 
advises that the Airport has negotiated the proposed lease 
Modification No. 3 to accommodate the Airport. The Airport 
went to United Airlines with the request for the Airport to 
take back from United Airlines 0.74 acres of property to 
which United had absolute rights under its long-term lease, 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



according to Ms. Schimke. The Airport's providing of up to 
2.61 acres of Airport property to United Airlines, which 
would enable United Airlines to provide its employees an 
additional 150 parking spaces at the same rate of the 
existing lease, was the 'price' for United Airline's 
agreement to relinquish the 0.74 acres back to the Airport, 
according to Ms. Schimke. Ms. Schimke states that the 
Airport was not in a bargaining position to demand pricing 
concessions from United as part of this deal. Ms. Schimke 
reiterates that the 0.74 acres that the Airport will obtain 
from United Airlines is necessary for the completion of the 
Airport's Multi-Modal Transportation Center and AirTrain 
extension (light rail system). In addition to the important 
public policy goals of the Multi-Modal Transportation 
Center, according to Ms. Schimke, the Parking Lot DD 
portion of the project (see Attachment) has significant 
revenue implications. Ms. Schimke anticipates that the 
expansion of Parking Lot DD (the expansion will initially 
be used for Airport employee parking and Airport tenant 
employee parking, and eventually for public long-term 
parking) allowed by the recapture of the 0.74 acres from 
United Airlines will generate additional parking revenues 
to the Airport conservatively estimated at $1,017,600 for 
the first full year of operation, rising to approximately $3 
million per year when the lot reaches capacity. Ms. 
Schimke advises that these parking revenues will increase 
significantly once the lot converts the Airport employee and 
Airport tenant employee parking to public long-term 
parking when the Multi-Modal Transportation Center is 
completed. 

6. Under the terms of the lease, not until the current 10- 
year lease extension expires on June 30, 2003 will the 
Airport, in conjunction with the Department of Real 
Estate, appraise the value of the land and negotiate with 
United Airlines a revised rent based upon the land's fair 
market value at that time, as of July 1, 2003. 

7. As previously noted, in 1993, under the first 10-year 
extension, the Airport and United Airlines negotiated an 
adjusted rent for this first 10-year extension, effective July 
1, 1993, to increase the annual rent by $3,261.77, from 
$32,617.73 per acre to $35,879.50 per acre annually, 
effective July 1, 1998. This one and only rent increase 
represents an average increase of only one percent 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

annually, or a total increase of 10 percent over the 10-year 
lease extension. This mid-term adjustment was not 
intended to reflect fair market value at mid-term, according 
to Ms. Schimke. While the Budget Analyst acknowledges 
that the 1973 original lease contained no provisions for 
annual rent adjustments, nothing precludes the Airport 
from negotiating a rent adjustment at this time, since the 
Airport is requesting approval from the Board of 
Supervisors of a proposed new lease Modification No. 3, 
which would provide United Airlines with 1.87 additional 
acres of Airport property. 



Recommendations: 1. Amend the proposed resolution to provide for retroactive 
authorization, in accordance with Comment No. 2 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors since under the 
proposed lease Modification No. 3, the Airport will not 
receive current fair market value until July 1, 2003 and, as 
the lease presently states, the Airport does not require 
United Airlines to pay annual rent adjustments based on 
annual percentage increases in the Consumer Price Index 
(CPI) over the entire potential 40-year term of this lease. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Attachment 
Fa^e 1 ot 2 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 

INTEROFFICE MEMORANDUM 



TO: Harvey Rose DATE: January 24, 2001 

Budget Analyst 

FROM: Bob Rhoades (C~* 

Deputy Airport Director, Business 

SUBJECT: Lot DD Development - MultiModal Transportation Center 



LotDD consists of a 3,218 space parking garage for Airport and tenant employees under Airport 
control. It also contains a secure 1,190 space, payed parking lot under long-term lease through 
year 2013 to United Airlines ('UA") for UA employee parking. Access to the employee parking 
garage is by way of a signalized entry/exit from South Airport Boulevard. Access to the UA 
employee parking area is from a separate signalized entry/exit from South Airport Boulevard, 
with an additional (stop sign controlled) exit onto westbound San Bruno Avenue. Shuttle buses 
transport employees to and from other Airport destinations. 

The Airport intends to improve Lot DD as part of a Multi -Modal Transportation Center 
("MMTC") development. Under the "Transit First Policy" adopted by the Airport Commission 
in 1996, the Airport is cornmitted to the development of a ground transportation system which 
gives priority to alternate transit modes. As part of this commitment, the development of the 
MMTC at Lot DD would provide a consolidated transportation connection for long-term airport 
parking, buses, and bicyclists, with access to the terminal complex. The MMTC would achieve a 
number of transit first objectives, such as: 1) reduce vehicular travel to and congestion on the 
passenger terminal roadways by providing direct access Yia AirTrain for remote long-term 
parking sites; 2) encourage use of public transit by providing a direct connection between a new 
SamTrans stop and AirTrain; 3) encourage bicycle commuting by providing an extension of the 
Bay Trail, and new bicycle parking facilities with direct access to the terminal complex via 
AirTrain. 

Lot DD improvements will involve an extension of the AirTrain System (the Airport light rail 
system); two MMTC AirTrain Stations; construction of a link of the San Francisco Bay Trail; 
and expansion of long-term parking facilities. The Lot DD improvements are broken into two 
phases for implementation. 

Phase I improvements include: paving an unimproved portion of the lot to add approximately 
1,600 additional parking spaces to initially be used by employees; signalization improvements at 
the intersections of South Airport Boulevard and the J-380 off and on-ramps; construction of the 
Bay Trail link through Lot DD; and relocation of the parking lot exit onto San Bruno Avenue. A 
contract is currently underway to make the first phase improvements. 



11 



'■".' Attachment 

' r ' ;.- -., Vape 2 of 2 

Harvey Rose 
January 24. 2001 
Page 2 

Phase II improvements include: the extension of the AirTrain System; constructiou of a second 
parking structure; and the conversion of the employee parking lot and structures into lonp-term 
parking facilities. 

The only viable vehicular access to the new parking area being developed is through the United 
Airlines' secure leasehold area. Without such access, the new surface parking area being 
developed in Phase I would be unusable, making less long-term parking available in the future. 
To obtain UA agreement to bisect their leasehold the Airport agreed to increase the UA 
leasehold to accommodate 150 additional parking spaces and to retain the access onto Srin Bruno 
Avenue for the UA employees. 

Phase I of the project is now underway. The entire MMTC, including phase II improvements, is 
expected to be complete within four to six years. 



12 



Memo to Finance and Labor Committee 

February 7, 2001 Finance and Labor Committee Meeting 

Item 3 - File 01-0052 



Department: 
Item: 



Lessor: 

Lessee: 

Total Acreage and 
Cost Per Month 
Payable by United 
Airlines, Inc. to the 
Airport: 



Purpose of Lease: 



Amount Payable by 
United to Airport: 



Airport Commission 

Resolution approving a new lease agreement for Plot 6 
between United Airlines, Inc. (United) and the City and 
County of San Francisco, acting by and through its 
Airport Commission 

City and County of San Francisco 

United Airlines, Inc. 



16.04 acres at a monthly rental rate of $132,054.65 for the 
first and second years of the proposed lease 
(approximately $8,232.83 per acre per month). For the 
first and second years, annual rent would total 
$1,584,655.76 ($98,794 per acre per year). 

United will use the 16.04 acres for an air cargo facility, 
administrative offices and employee parking. 



$1,584,655.76 per year for the first and second year of the 
lease. According to Ms. Dorothy Schimke of the Airport, 
rent in the amount of $1,584,655.76 per year represents 
the fair market value of the subject 16.04 acres on June 1, 
1999, the retroactive effective date of the proposed lease. 
Presently, United pays the Airport $508,353 under permit 
for 19.35 acres (see Comment No. 2). The proposed lease 
provides for annual increases in the rent based on 
increases in the Consumer Price Index (CPI). According to 
the proposed lease, the CPI adjustment would begin on 
June 1, 2001. As stated in the Attachment provided by 
the Airport, there will be no CPI adjustment between 
June 1, 1999 and June 1, 2001. In the sixth year of the 
proposed lease, the annual rental payment to the Airport 
will be determined by a City reappraisal of the land to 
reestablish the fair market value amount. Subsequent 
annual increases in the rent will be made based on 
increases in the CPI through the end of the lease. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

February 7, 2001 Finance and Labor Committee Meeting 



Term of Lease: 



Right of Renewal: 

Maintenance and 
Operations: 



Description: 



Retroactive to June 1, 1999 to June 30, 2011 (12 years 
and one month) 

Lessee bas no renewal rights. 



The Lessee, United Airlines, Inc., pays for the costs of all 
maintenance and operations. 

The proposed resolution would authorize a new 12 year 
and one month lease retroactive to June 1, 1999 of 16.04 
acres of a newly configured Plot 6 to accommodate 
United's air cargo facility, some administrative offices and 
employee parking. The 16.04 acres of a newly configured 
Plot 6 would constitute approximately 83 percent of the 
19.35 acres of Plots 5 and 6 covered under a month-to- 
month permit, cancelable on 30-day notice, since the 
expiration of original leases in 1993. According to Ms. 
Schimke, United occupied the 16.04 acres from 1993 until 
June 1, 1999 on a permit basis, instead of under a lease, 
pursuant to the following conditions contained in a 
Memorandum of Understanding negotiated in the early 
1990s between the Airport and United Airlines: 

1) Upon termination of the leases of Plots 5 and 6 
in 1993, the leases would be replaced in the interim 
by month-to-month permits, for the same areas at 
the same land rental rates as were then in effect, 
until the land was required for the Airport's Master 
Plan construction or the functions were 
accommodated elsewhere; 

2) The Airport would offer United a "standard 
lease" for that portion of the site primarily 
comprising Plot 6, for continued accommodation of 
its air cargo facility, offices and related parking; 

3) Rent under the interim permit(s) would remain 
at the same rate as was in effect upon termination 
of the Plots 5 and 6 leases, and would be adjusted 
to fair market value at the time the new leases 
were in place. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

February 7, 2001 Finance and Labor Committee Meeting 

The-differenees J between-the-proposed-lease-for-16T04-acres 

of a newly configured Plot 6 and the existing month-to- 
month permit for 19.35 acres of Plots 5 and 6 are (1) the 
permit is cancelable upon 30-days notice, (2) the new- 
lease adjusts the rents as described in Comment No. 2 
below, (3) 1.43 acres have been added to result in a total 
acreage of 16.04 acres for Plot 6, which originally totaled 
14.61 acres, and (4) Plot 6 has been slightly reconfigured 
due to the Airport's Master Plan construction program for 
Boarding Area "G" and the Air Train (Airport Light Rail 
System). 

The proposed lease would reflect the City's 
Administrative Code and other City requirements, such 
as provisions requiring compliance with the ban on 
tropical hardwoods and virgin redwood, the MacBride 
Principles related to employment inequity in Northern 
Ireland, the Non-Discrimination in City Contracts and 
Equal Benefits Ordinance, and the Minimum 
Compensation Ordinance. 

Comments: 1. The Airport Commission adopted Resolution No. 00- 

0464 on December 19, 2000, recommending the proposed 
new lease to United retroactive to June 1, 1999. As shown 
in the Attachment, the lease is retroactive to June 1, 1999 
because in June of 1999, the Airport determined that the 
Air Train required adjustments that would encroach upon 
the eastern boundary of the new Plot 6. Finalization of 
the Plot 6 lease was therefore put off until the Air Train 
issues were settled and a legal description of the premises 
could be accurately determined. Ms. Schimke reports that 
because these adjustments were minimal, United agreed 
to establishing an effective date of June 1, 1999 for the 
proposed lease at the then market value rental rate. The 
final configuration of the parcel incorporating the Air 
Train land recapture was not defined and resolved 
between the Airport and United until November of 2000. 

2. According to Ms. Schimke, the proposed lease of 16.04 
acres includes 14.61 acres of the old Plot 6 and 1.43 acres 
of the old Plot 5. As previously noted, the annual rent for 
the first and second year for the 16.04 acres would be 
$1,584,655.76, a net annual increase of $1,076,302.76, or 
an increase of approximately 211.7 percent, retroactive to 
June 1, 1999, from the permit rent of $508,353 payable by 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

February 7, 2001 Finance and Labor Committee Meeting 



United to the Airport forthe-19.35 acres of PlotsS and 6 
covered under permit. The new proposed lease pertaining 
to 16.04 acres would result in a reduction of 3.31 acres 
being leased by the Airport to United. Ms. Schimke 
reports that upon approval of the proposed lease by the 
Board of Supervisors, United would pay retroactively to 
the City $1,793,838, representing the difference in the 
monthly rental income of $89,691.90 for the 20 month 
period from June 1, 1999, the start of the proposed lease, 
through January 31, 2001. The net increase in rent 
payable by United to the Airport for the first two years of 
the lease is calculated as follows: 





Approximate Annual 
Cost per Acre 


Total Acres 


Annual Airport 
Revenues 


Old permit: Plot 5 


$42,000 


4.07 1 


$170,940 


Plot 6 


$22,082 


15.28 


$337,413 


Subtotal for permit 




19.35 


$508,353 


Proposed new lease for 

new Plot 6 (includes a 
majority of the acreage 
of the old Plot 6 and a 
small parcel of the old 
Plot 5) 


$98,794 


16.04 


$1,584,655.76 








$1,076,302.76 



3. The Budget Analyst notes that had the rent amount 
for the second year of the proposed lease been adjusted 
upward according to the 3.77 percent increase in the CPI 
between June 1, 1999 and June 1, 2000, the rent would 
have increased by approximately $59,742 to an annual 
rent of approximately $1,644,398 instead of the proposed 
annual rent of $1,584,655.76 for the first and second year 
of the proposed lease. 

4. Since the lease began on June 1, 1999, the proposed 
resolution should be amended to provide for retroactive 
authorization. 



1 Under the proposed lease for the new Plot 6, United will lease 1.43 acres of the 4.07 acres of 
Plot 5 that were under permit. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance and Labor Committee 

February 7, 2001 Finance and Labor Committee Meeting 

Recommendations: 1. Amend the proposed resolution to provide for 

retroactive authorization, in accordance with Comment 
No. 4 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors because there 
will be no CPI adjustment for rent for the second year of 
the proposed lease. Had the rent amount being charged by 
the Airport to United Airlines for the second year of the 
proposed lease been adjusted upward according to the 
increase in the CPI, the rent payable by United to the 
Airport would have increased by approximately $59,742 
to an annual rent of $1,644,398, instead of the proposed 
annual rent of $1,584,655.76 as noted in Comment No. 3. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

i -i 



Attachment 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: Harvey Rose DATE: January 25, 2001 

Budget Analyst 

FROM: BobRhoades ftL, 

Deputy Airport Director, Business 

SUBJECT: Plot 6 Lease - United Airlines 



As discussed in the Budget Analyst's report, the subject lease comprises one element of a 
complex series of land exchanges required to implement the Airport's Master Plan. The general 
concept, negotiated in the early 1990's, provided for existing permits to remain in place, at then- 
current rents, until the land was required for the Master Plan construction or the functions were 
accommodated elsewhere. It was generally agreed that the Plot 6 lease would not be finalized 
until the parcel reached its final configuration. It was anticipated thai the plot would reach its 
final configuration when the Airport recaptured a parking parcel in the area now comprising a 
portion of the new Boarding Area G apron. 

The parking parcel was surrendered by United in June 1 999; however, at that time it became 
apparent that the Air Train (Airport light rail system) guideway required adjustments that would 
encroach upon the eastern boundary of Plot 6. The Plot 6 lease could not be absolutely finalized 
until the guideway issues were settled and legal description of the premises could be written, 
based upon formal survey. The issues were finally resolved in late 2000. 

Because the guideway adjustments were rninimal, the parties agreed that, once approved by the 
Board of Supervisors, the Plot 6 rent commencement would be retroactive to June 1, 1999. The 
first CPI adjustment will occur in accordance with lease provisions, once the lease is actually in 
place (after Board approval). The Base Index for CPI adjustments is defined as "the most recent 
Consumer Price Index published immediately prior to the Commencement Date," or April 1999. 
The Comparison Index for the first (June 2001) adjustment will be April 2001 , generating a two- 
year value increase. 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Item 4 -File 01-0047 

Department: 

Item: 

Amount: 
Source of Funds: 

Term of Agreement: 
Description: 



Budget: 



Police Department 

Resolution authorizing the Chief of Police to execute an 
agreement with the State of California in the amount of 
$103,358 to obtain various training equipment. 

$103,358 

California Commission on Peace Officer Standards and 
Training (POST) 

July 1, 2000 through June 30, 2001 (see Comment No. 1) 

Currently, the California Commission on Peace Officer 
Standards and Training (POST) requires all California 
Peace Officers to undergo a minimum of 24 hours of in- 
service training every two years. Effective for Fiscal Year 
2000 - 2001, POST added the additional requirement that 
14 of the mandatory 24 hours of in-service training be in 
particular skills, which include the use of force, vehicle 
operation, and arrest and control skills (i.e., the ability to 
physically subdue persons under arrest who are 
uncooperative). In order to enable local law enforcement 
jurisdictions to meet these requirements, POST has offered 
to reimburse 23 law enforcement jurisdictions (see 
Attachment I) throughout California for the acquisition of 
the necessary training equipment. 

The subject resolution would authorize the Chief of Police 
to execute an agreement with the California Commission on 
Peace Officer Standards and Training, in order for POST to 
reimburse the Police Department $103,358 for the costs of 
the training equipment needed by the Department for the 
State-required training. The new equipment would be 
utilized at the Police Academy. 

$103,358. Attachment II, provided by the Police 
Department, contains a detailed list of the equipment the 
Police Department would acquire. Attachment III, provided 
by the Police Department, contains explanations of the 
equipment to be acquired. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Comments: 



Recommendation: 



1. The proposed agreement states that the term of the 
agreement would commence on July 1, 2000, or upon 
delivery of an approved copy of the contract to POST. 
Captain Dan Lawson of the Police Department states that 
the Police Department would not transmit an executed copy 
of the proposed agreement to POST until the Police 
Department has obtained approval of this proposed 
resolution from the Board of Supervisors. 

2. The proposed agreement contains multiple 
indemnification provisions. Ms. Margaret Baumgartner of 
the City Attorney's Office states that she has reviewed the 
subject proposed agreement, and that the indemnification 
provisions contained therein are standard and pose no 
unreasonable risk to the City. 

3. According to Captain Lawson, after entering into the 
proposed agreement, the San Francisco Police Academy 
would be designated as a regional California Law 
Enforcement Mini-Skills Academy by POST. The Police 
Academy would then provide the State-required training to 
its own uniformed personnel and to security personnel of 
other jurisdictions, such as UCSF and San Francisco State 
University, if sufficient training time is available. 
According to Captain Lawson, POST would fully reimburse 
the Police Department for all such costs the Police 
Department incurs for providing the State-required 
training. 

Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Field Training Program 



Attachment I 
■rage 1 of 2 



CA&FORNl&PQST^: 



home / srreuAP- ~v, 



CONTACT; 

POST 

916.227.3909 
postmaster© 
oott.ca.qov 



POST Regional Skills Training ( 

Resource/Contact Pa| 

October, 2000 



[SKILLS CENTER CONTACT 


\ CONTACT 


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LEDS SIMULATOR 


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FOS SIMULATOR 


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ALAMEDA SD 


Teay Godchsu 


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Lea Moors 


| Richard Bond 


38-01 1-82AIS4FAAC 


925-551-5967 


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925-803-7129 


,1925-551-6970 


CC/LCS MEDANOS 


Bud MirKwIth 




Oille Sansen 


||Gra(cnen Frecter 


98001 1-76 EIS 4 AMOS 


925-250-2635 


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925-439-2181x3273 


||x3274 


ALAN HANCOCK 


BUI Steam 922-6965 3812 


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Greg Oos9«y 


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95-011-90 AIS 4AMOS 


605-925-6674 




605-925-6574 


6874 


FRESNO PD jJBill Doaley 


Bill Dooley 


[LL Greg Gamer 


96-011-53 EiS 4 ISIM 


559-498-1460 


(559-498-1450 


LOS ANGELES PO 


Bob Reia 


Sgt. Frank Mica 


!|Capt. RichWemmer 


98-011-78 FATS & AMOS 


813-532-3722 


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213-485-6524 


[310-342-3010 


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George Grain 


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Derek Sill 


|Oave Furmanski 


98-011-99 EIS &FAAC 


309-629-9535 


323-881-3700 


[323-581-3700 


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EdVloMSCSD 


Greg Hausmann 


[Cflff Harper 


98-011-59 AIS 4 AMOS 


209-525-4704 


209-525-4709 


1 209-525-4701 


ORANGE SD 


BobNaranJo 




Ken Merrill 


TTjni Flrmersn 


98-011-91 AIS 4 ISIM 


714-429-1870 


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714-535-0923 


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Ken Benlly 


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Dan Kupsky 


i| Dr. Leslie Sue 


98-01 1-77 FATS & AMOS 


530-595-2405 


530-225-42B5 


1 530-895-2401 


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Jonn Doyle 


Larry Nering 


flLLRickHiggms 


98-011-92 AIS 4 ISIM 


909-466-2800 


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[909-485-2500 


SACRAMENTO SD 






Sgt Lane Bartow 


|u Lena Maddux 


98-011-74 AIS 


916-B74-1956 


.[875-0021 


SACRAMENTO PD 


Sot. Mike Smith 


Cpl Mike Camp 


jCapt. Mary Savage 


93-01 1-AMOS 


916-228-3859 p810-6696 


264-8282 


||433^»006 


SAN BDNO SD 


Gordon Clemmer 




Gordon Clemmer 


|Capl. Greg Kyritsis 


98-011-97 FATS & AMOS 


909-880-2622 


909-880-2622 


l[ 909-880-3401 


[SAN DIEGO PD 


Paui Becotte 




Steve Margetts 


|ll Boo Slinson 


J98-01 1-94 FATS tlSlM 


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530-842-83H1 


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Nick Beltagiia 


Greg Wagstaff 


Li. Dave Babineau 


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j| 409-501-0960 


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Larry Sllmnch 


|[Latry Stlmach 


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2/1/2001 12:1 1 PM 



FMd Training Program 



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;[WEST COVINAPD 
;[98-QV|-99FATSAlSlM 



Dennis Mwcilack |Tommy Garcia 



[Ron Gannon 



626-814-6579 



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Dennis Dunne 



Dennis Dunne 



[Ron H«vm:r 
^0^-27f>S477~" 



99-011-64 



408-270-6^58 



408-270-6458 



COLL.OF REDWOODS 



Ron Kirkpalrick 



Gary Sokolcw 



707-464-4334 



[KER_N6D 



|707^464-;334 



Kir* Foster 



661-391.7500 



[SAN_FRANCISCO PD 
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|Comm. Clajaia Fwecoal 
[6S1-351-7679 



l|ll Hen ry Pa rra 



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CepL Dan Lawion 



415-713-9932 



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Capl Kemon Rsir.ey 



60£-3£ 6-4419 



SANTA ANA PD 



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Chucx Deaklnj 



SgL Tony Levalino 



Sgt. Tony Levalino 



SELF-FUNDJOFAAC _ ([714-246-8057 



Rodger B. Fluke, POST Webmaster 
Copyright © 2000 by POST. All rlghu reserved. 
Revised: 19 Oct 2000 14:04:59 -0700 . 



2or'2 



271/2001 121 1 



Attachment II 



CONTRACTOR: San Francisco Police Department 
CONTRACTS: 00-011-36 



12 



EXHIBIT D 
Equipment Acquisition and Budget Detail 



Phase I 



A) Acquisition cf the fallowing training equipment: 






^Quantity 



.-..■-".: •;'•':.■.- Itera'iH 



. .'. - . f : Equipment ^; •.";;--•-• " : 

1 Skid car platform 



Laptop computer for presentations and support 

a. Primarily for the Driving Simulator course; 

b. Minimum specs: 400 mh, Pentium 2, 128 MB RAM, 10 GB 
capacity hard drive, CD ROM w/ DVD, Active Matrix screen, must 
be compatible w/LCD projector 



Total: 

$40,000 



1 


Car for above platform (new Ford Crown Victoria - same make as 
typical patrol car) 


$22,000 


3 


"Freddie" life-size training mannequins, plus related equipment and 
supplies 


510,089 


3 


"Redman" type training suits 


$3,000 


1 


1000 Lumen or better LCD projector, RGB Ac Video 


$5,000 



$3,000 



20 Training Handcuffs 


$1,700 


20 Straight Batons training type 


$400 


20 Side-handle Batons, Training Type 


$400 


Sufficient floor mats to facilitate "Freddie" Arrest and Control Techniques 


$8,822 


Red pistols, knives, shotguns 


$1,070 


Sub-Total 


$95,481 


TAX (8.25%) 


$7877 


TOTAL 


S 103358 



*Jf there are remaining funds, Contractor shall obtain approval from the Regional Skills 
Project Coordinator, Forrest Billington, (916) 227-4895, to purchase other peripheral training 
items as needed 



Attachment III 



Memorandum 




San Francisco Police Department 



Captain Daniel Lawson, #622 

To: Captain Daniel Lawson, Training DivisiEft licc Academ y^* r ^ — B"^ D 

_ D D 

From: Lieutenant Richard Parry ,/T)ii5ln^Division n Q 

Date: Thursday, February 01 , 200 1 

Subject: Equipment Use For CPT Program 



Issue: 

Listed below are the proposed applications for the equipment being purchased under 
POST contract 00-01 1-36 the Perishable Skills Training Program. 

Discussion: 

All of the equipment listed in the attached exhibit "D" will be utilized in this weekly 
training program as prescribed by POST. The skid car platform and Crown Victoria 
patrol vehicle will be utili2ed to supplement vehicle operations training in both our Basic 
and our Advanced Courses. The remaining listed training equipment including 
handcuffs, batons, red weapons, floor mats, Freddies and Redman suits will be used to 
support the POST mandated Arrest and Control Techniques training and evaluation 
portion of the program. 

The laptop computer and LCD projector will be utilized to present POST power point 
lesson plans in the Continuing Professional Training Program. 

Recommendation: 

N/A 



20d 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

Item 5 - File 00-2187 

Note: This item was continued by the Finance Committee at its meeting of 
January 31, 2001. 



Department: 
Item: 



Contract Term: 
Description: 



Department of Public Health (DPH) 

Resolution authorizing the Director of Public Health and 
the Purchaser to execute a contract between the City and 
County of San Francisco and Health Advocates, LLP to 
provide uncompensated care recovery services. 

March 1, 2001 through December 31, 2002 (approximately 
22 months). 

Uncompensated care recovery services include the 
assistance to complete Supplemental Security Income 
(SSI) and Medi-Cal eligibility applications on behalf of 
DPH patients, and representation and legal assistance for 
patients in SSI fair hearings and appeals, for the purpose 
of collecting unpaid inpatient hospital bills for DPH 
services that are provided to indigent patients. The 
proposed resolution would authorize DPH to enter into a 
contract with Health Advocates, LLP (HA), a private 
contractor, to provide an uncompensated care recovery 
program. 

The DPH issued a Request for Proposals (RFP) in 
September of 2000, and received the following two bids in 
response to its RFP: (1) Health Advocates, LLP for 
$1,180,000 each contract year and, (2) Paralign for 
$1,090,000 each contract year. Attachment I, provided by 
Ms. Monique Zmuda from the DPH, indicates that the bid 
amounts were based on estimated annual revenue of 
$6,000,000, which has since been reduced to $5,800,000. 
Ms. Zmuda further advises in Attachment I that HA 
reduced its bid by $90,000 to $1,090,000 each contract 
year, the same amount bid by Paralign, after negotiations 
with the DPH. According to Ms. Zmuda, HA was selected 
based on the DPH's evaluation of the established criteria, 
which awards points based on recent relevant experience, 
the scope of work to be performed, the quality of past 
projects and cost. Ms. Zmuda states that the DPH also 
required the bidder to provide these services by multi- 
lingual and multi-cultural staff. Ms. Zmuda further 
states that the DPH also built in additional services into 
the scope of work, including following up on treatment 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



authorization requests, and incurring the cost of re-billing 
for services provided, once the clients have been made 
eligible for Medi-Cal. 

According to Ms. Zmuda, the DPH has contracted out 
uncompensated care recovery services since 1988 to help 
supplement in-house efforts on uncompensated care 
recovery services. Ms. Zmuda advises that San Francisco 
General Hospital (SFGH) has an internal staff of ten 
Hospital Eligibility Workers to assist SFGH patients in 
identifying financial resources to pay for inpatient 
hospitalization for which no source of funding is currently 
available. Eligibility determination, which is provided by 
DPH personnel, and authorized by the City's Department 
of Human Services, typically includes assistance in 
applying for Medi-Cal or SSI, and making appropriate 
third-party claims. The contractor will handle those cases 
which the internal DPH eligibility workers have deemed 
"unreimburseable," usually involving former inpatients 
who have been discharged form SFGH. These 
uncompensated care services include identifying financial 
resources to pay for the care provided, field work on 
behalf of indigent patients, such as visits to homeless 
shelters; assistance in obtaining further medical 
treatments or evaluations, as necessary; efforts to locate 
former inpatients whose addresses are not known, and 
patient advocacy and representation in appealing denials 
of benefits to administrative agencies. 

Based on a prior year actual recovery from contracting 
this service, Ms. Zmuda advises that the DPH was paid 
approximately $5,800,000 a year, or approximately 
$483,333 a month from making indigent patients eligible 
for third-party payment. The DPH anticipates the same 
level of annual reimbursement to be made under the 
proposed contract period. 

The proposed subject contract would only pay the 
contractor a percentage of the revenues actually collected, 
on behalf of the City, according to the following schedule: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

Cumulative Revenues Generated Contingency Fees 

Each Contract Year Paid to the Contractor 

$0 to$1.999.999 NET 20 percent 

$2 million to$2,999,999 NET 18 percent 

$3 million and above NET 16 percent 

"NET' is used to describe the actual cash received by 
SFGH as opposed to any unique program determinations 
of allowable amounts and the deduction of contractual 
allowances. In accordance with the contract provisions, 
HA would be paid a varying fee by the DPH based on the 
percentage of the revenues collected by the contractor. 

Comments: 1. As indicated above, the proposed contract would 

extend for the 22-month period from March 1, 2001 
through December 31, 2002. According to Ms. Zmuda, 
DPH expects to realize approximately $10,633,333 in 
additional revenues under this 22-month contract, with 
the contractor to be paid an estimated $1,884,667, or an 
overall average of 17.72 percent of the revenue collected, 
for net estimated revenues to the City of $8,748,667 for 
the term of the 22-month contract. Attachment II, 
provided by DPH, highlights the estimated revenue and 
contingency fees associated with the subject contract 
agreement. As mentioned above, the actual contingency 
fees paid to HA will depend on the revenue realized 
during the contract period. 

2. The proposed subject resolution authorizes the 
Director of Public Health and the Purchaser to make 
amendments to the subject contract, if needed. According 
to Ms. Zmuda, this is a standard provision in all of the 
DPH's contracts, which allows the DPH to make minor 
changes, such as including an additional scope of work 
requirement or extending a contract for a few months 
while an RFP is in process, but not change the intent of 
the original contract. 

3. On January 31, 2000 the Human Rights Commission 
(HRC) issued a report to the Finance Committee 
pertaining to the Department of Public Health (DPH) 
Request for Proposal Process #17-2000: Uncompensated 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

Care Recovery Services (Attachment III). The HRC 
concluded: 

"There was a general consensus among the panelists that 
Health Advocates submitted a superior proposal. In 
addition, DPH conducted a well organized and 
documented RFP process. However, ... it is extremely 
important to avoid even the appearance of bias in these 
procurements. In this regard, HRC believes that there 
were several flaws in the process. 

First, none of the panel members should have had any 
recent dealings with either proposer. Second, the partial 
reference checks of only one proposer should not have 
been given to the panelists. If reference checks were 
shared with the panelists at all, then full and complete 
checks for both the panelists should have been included. 
Finally, the letter of recommendation from the domestic 
partner of the CFO (of the DPH's Community Health 
Network) should not have been included in Health 
Advocate's proposal. Whether or not Health Advocates 
knew of the relationship, the sender must certainly have 
been aware of the conflict of interest and should have 
refrained. 

There is no evidence to show that these flaws influenced 
the outcome of the evaluation process in any significant 
way. However, HRC believes that the most equitable 
resolution to this RFP would be to convene another panel 
to reassess the two previously submitted proposals, 
removing the letter from the CFO's domestic partner from 
that of Health Advocates." 

4. The Budget Analyst requested a written response from 
Ms. Zmuda pertaining to the HRC report dated January 
31, 2000. As of the writing of this report, Ms. Zmuda has 
not yet responded to the Budget Analyst. 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



DEC-20-2000 14: IB FROM DPH-CFO 



City and County of San Francisco 




Date: 

Memo To: 

From: 
Re: 



to mRUEY rose Attachment I 

Department of Public Health 

Mitchell H. Katz, M.D. 
Director of Health 



December 20, 2000 

Harvey Rose 
Budget Analyst 

Monique Zmuda fH 
Chief Financial Officer 

Proposed Contract with Health Advocates, LLP 



This memo is in response to questions regarding the proposed contract with Health 
Advocates LLP, to provide uncompensated care recovery reimbursement services for the 
Community Health Network of the Department of Public Health. 

The following summarizes the RFP Process: 



Date RFP Issued: 
Selection Made: 



September 29, 2000 
November 21, 2000 



Number of Bidders: 2- Both profit-making private firms 

Bid Amounts: Both firms were requested to bid on services for revenue recovery of $6 
million annually. Although the bid from Health Advocates was 590,000 higher than the 
other qualified bidder, Health Advocates had a higher score, and thus was awarded the 
contract. In contact negotiations with Health Advocates, the Department was successful 
in securing a reduction equivalent to 590,000 in the contract rate for the services. 



(415) 554-2600 



101 Grove Street 



Fllininn md Path 

San Francisco, CA 94102 



DEC-20-2000 14: 18 F ROM DPH-CFQ 



TO HftRUEY ROSE a i- •. v 

Attachment II 



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City and County of San Francisco 




Willie Lewis Brown, Jr. 
Mayor 



Attachment III 

Human Rights Commission 

Contract Compliance 

Dispute Resolution/Fair Housing 

Minority/Women/Local Business Enterprise 

Lesbian Gay Bisexual Transgender & HIV Discrimination 

Virginia M. Harmon 
Interim Director 



MEMORANDUM 

Date: January 31 st , 2001 

To: Honorable Members of the Finance Committee 

Through: Virginia Harmon 

Interim Director, HRC 

From: Diana Rathbone 

Senior Contract Compliance Officer, HRC 

Subject: Department of Public Health (DPH) Request for Proposal # 17-2000: 

Uncompensated Care Recovery Services 



At its regular meeting on January 17 th , 2001, the Finance Committee of the Board of Supervisors 
asked the Human Rights Commission to look into the selection process for the above referenced 
contract and to ensure its impartiality. 

This report is a response to that request. It includes a brief contract history, followed by a 
summary of normal selection procedures for professional services contracts. These procedures 
are then compared with those on this contract, with special reference to potential problem areas 
raised at the Finance Committee meeting. 

BACKGROUND 

In September, 2000, DPH issued a Request for Proposals (RFP) for uncompensated care 
recovery services. The purpose of this RFP was to hire a contractor to assist DPH in collecting 
unpaid inpatient hospital bills for services that are provided to indigent patients. Such services 
include, for example, completing Supplemental Security Income (SSI) and Medi-Cal eligibility 
applications on behalf of patients, and representing them at SSI fair hearings and appeals. 

Two proposals were received in response to the RFP, one from the incumbent, Paralign, and the 
other from a new contractor called Health Advocates. 

The proposals were rated by an expert panel and Health Advocates received the highest score. 
When Paralign was notified that it had not been selected, it filed an appeal with DPH, which 
DPH overruled. The Health Commission then voted to award the contract to Health Advocates 
at its meeting on December 12 th , 2000 and, because the contract involves incoming revenues to 



25 Van Ness Avenue 

Suite 800 

San Francisco 

California 94102-6033 



TEL (415) 252-2500 

FAX (415) 431-5764 

TDD (415) 252-2550 

http://www.sfhumanrights.org 



& 



Attachment III 
Page 2 of 6 



Finance Committee, Board of Supervisors 
January 31"\ 2001 



the City in excess of $1 million, it was forwarded to the Board of Supervisors Finance 
Committee for its approval. 

Paralign has filed an application for a temporary restraining order and a motion for a preliminary 
injunction in the United States District Court for Northern California. The court has agreed to 
continue the date of this motion until the Board of Supervisors awards the contract. 

CONTRACT SELECTION PROCEDURES 

The City has two distinct processes for the selection of contractors. They are variously described 
in Chapters 6 and 12D.A of the San Francisco Administrative Code. 

Construction Contracts. Construction contracts are put out to bid and the contract is awarded 
to the lowest responsible and responsive bidder. 

Professional Services Contracts. Professional services contracts are awarded using an RFP 
process. The aim of the RFP is to select the company which will provide the highest level of 
service (i.e., which proposer will design the most beautiful and functional hospital; which 
proposer will provide accounting services in the most efficient and timely manner; which 
proposer will create the most user friendly and reliable computer software program). 

On many professional services contracts, particularly, architecture and engineering contracts, the 
quality of the work being proposed is the over-riding factor and, in those cases, fees are 
submitted, if they are submitted at all, in a separate, sealed envelope. In this way, the department 
has a starting point for cost negotiations with the successful contractor, but the panel is not 
influenced by questions of money. 

On other contracts, as in the one before you, price may be an issue, and in these cases, it will be 
evaluated along with all other aspects of the proposal. However, price will never be the 
determining factor. If it were the determining factor, there would be no need to issue an RFP and 
the contract would be awarded to the lowest bidder, as if it were a construction contract. 

Although every effort is made to keep the RFP process as objective as possible, it is, compared 
to the bidding process used for construction contracts, a more subjective approach. Therefore, 
every effort has to be made to document and to ensure the fairness of the selection procedures at 
each stage of the process, and to eliminate any possible suggestion of bias. 



A TYPICAL SELECTION PROCESS. 

RFP. The first step is for the department to issue an RFP. It should spell out exactly what the 
department is looking for, including clearly defined minimum qualifications and the types of 
information that should be included in the proposal. The RFP should also contain specific 
evaluation criteria, with predetermined points assigned to each criteria, so that proposers will 
understand how they are going to be scored. 



OS 



Attachment III 
^age j ot fa 



Finance Committee, Board of Supervisors 
January 31", 2001 



On a typical contract, if points are assigned to the price, these points will be assessed using a 
predetermined formula based on the lowest price. 

Preproposal Meeting and Questions. A pre-proposal meeting is held to answer the questions 
of potential proposers. Minutes are taken and are then distributed to all potential proposers, both 
those present at the meeting and those who have expressed interest in the RFP but who are not at 
the meeting. In addition, answers to any phone questions provided by the department to any 
interested proposer are provided by mail to all interested proposers. 

Panel. The department selects a panel, normally composed of three or more members, to 
evaluate the proposals. Panelists must possess appropriate expertise to evaluate the contract in 
question and the panel as a whole must reflect the ethnic and gender diversity of San Francisco. 
HRC strongly recommends that at least one panel member be recruited from outside the 
department, and one from outside the City, to ensure impartiality. However, this is not a 
requirement. 

No panel members should be involved in the preparation of the RFP in question, or in the 
planned future management of the contract. Additionally, no panel members should have a 
previous professional or personal relationship with any of the proposers. 

Panel Orientation. The panel will normally receive an orientation prior to commencing its 
work. The point of the orientation is to answer any questions the panelists may have, and to 
provide rules to ensure an equitable process. For example, it is inappropriate for any panel 
member to attempt to influence the score of another panel member, to indicate by body language 
during an oral interview an opinion of the presentation in progress, to score a written proposal on 
anything other than the information contained within the proposal, or to give an oral interview of 
one hour, with one set of questions, to one proposer, and ten minutes, with a completely different 
set of questions, to another. 

Scoring Written Proposals. 

Once the proposals have been received, a copy of each one is sent to the panelists, after which, a 
meeting is normally convened to score the written proposals. The HRC's Rules and Regulations, 
pursuant to Chapter 12.D.A of the San Francisco Administrative Code (the Minority, Woman 
and Locally Owned Business (M/W/LBE) Ordinance) encourage departments to prohibit any 
discussion at all among panelists, other than for points of clarification and follow up, allowing 
each panelist to score each proposal and interview according to his or her individual assessment. 
However, this is not a requirement. 

Oral Interviews. 

Once the proposals have been evaluated, the department usually creates a shortlist of the top 
scorers, and these firms are then invited to an oral interview in front of the same panelists. All 
proposers should be asked the same questions, each interview should be scored according to 



Attachment III 
Page A of 6 



Finance Committee, Board of Supervisors 
January 31 ", 2001 



predetermined evaluation criteria and points and all interviews should take the same amount of 
time. Again, HRC discourages discussion among the panelists, other than for points of 
clarification and follow up, but this is not a requirement. 

Negotiations and Contract Award. 

At the conclusion of the selection process, the department enters into discussions with the firm 
which submitted the highest rated proposal. At this point, everything in the proposal, including 
the price, is open to negotiation. 

Once those negotiations are successfully completed, the contract is ready for award. If the 
negotiations break down, the department will open negotiations with the second highest scorer, 
and so on, until it has a successful contractor. 

QUESTIONS ABOUT THE PROCESS USED IN THIS RFP 

General. 

DPH, for the most part, followed the procedures outlined above. It is perhaps worth noting that, 
during the evaluation of the written proposals, the panel was allowed to discuss the responses to 
each of the evaluation criteria, prior to scoring that criteria according to the predetermined 
points. Notes were kept of these discussions, and these were later typed up and sent to each 
panel member for review. While HRC prefers that no discussion take place, such a practice is 
not prohibited, and there is nothing in either the notes or the scores to suggest anything other 
than a fair, thoughtful and unbiased evaluation. To the contrary, panel members report that it 
was an extremely formal selection process. 

It is DPH's practice to assign the selection process to a contract administrator. The contract 
manager, the person who will be in charge of the contract once it is awarded, is not involved in 
the development of the RFP other than to advise on the selection of panel members and to be 
present at the panel evaluations to answer technical questions. 

DPH decided not to conduct oral interviews. 

References. Paralign's proposal included very few letters of recommendation, in comparison 
with that of Health Advocates. During the panel evaluation of the written proposals, the 
contract manager asked the contract administrator if she could share the results of Paralign's 
reference checks in an effort to bolster the information in Paralign's proposal. Permission was 
granted. At that point, the contract manager had not completed Paralign's reference checks, and 
had not started on those of Health Advocates. 

The Paralign references were mixed, certainly more mixed than any letter a proposer would opt 
to include in a proposal. On the other hand, all but one of the panel members, although they 
remember the incident, do not feel that it effected their scoring one way or the other. They were 



Attachment III 
Page iot b 



Finance Committee, Board of Supervisors 
January 31", 2001 



more influenced by the proposal itself. The other panel member felt it had increased an already 
negative assessment of Paralign's performance under this criteria. 

No information was given to the panel regarding the outcome of Health Advocate's references, 
because they had not yet been checked. 

Bias. 

It is obviously extremely important that no panelists and no department staff involved in the RFP 
process should have any investment in its outcome that could bias the proceedings. For example, 
it is important in a contract such as this one that none of the panelists should have previously 
worked with the incumbent. However, two of the five panelists have had ongoing professional 
dealings with the incumbent in the performance of its current contract. 

In addition, the contract manager, as well as her supervisor, the Chief Financial Officer (CFO) of 
DPH's Community Health network, had an existing relationship with one or other of the 
proposers. The CFO's domestic partner used to work for Health Advocates, and her letter of 
recommendation was one of those included in Health Advocate's proposal. The CFO is also 
close friends with several Paralign employees. For these reasons, when he was asked to serve on 
the panel, the CFO recused himself. However, as the contract manager's supervisor, it was also 
his job to review and sign off on all the RFP documents once the process was complete, the 
highest scorer determined and the letters of notification ready to be issued. The CFO did not 
recuse himself from this task and signed the document. 

It seems clear that the CFO, in order to avoid even the appearance of bias, should have recused 
himself from the entire process, including lending his signature to the final RFP approval. 
However, because his role was so minor, and occurred post selection, it seems clear that his 
signature could not have influenced the outcome of the process itself. Additionally, none of the 
panel members knew the name of the CFO's domestic partner, and therefore could not have been 
influenced by the presence of this letter in Health Advocate's proposal. 

The contract manager is the second person with an apparent conflict of interest. She was hired in 
July, 2000, two months before this RFP was issued, and part of her assignment was to work with 
the incumbent in the execution of its current contract. In addition, in a previous employment, 
she had hired Health Advocates to perform similar services to those requested in this RFP. 
Lastly, although she was not on the panel, she selected all but one of the panel members and she 
was present while the proposals were being scored as a technical advisor. It was in this role that 
she shared the partial references with the panel members. 

The panel members say that the contract administrator played the most important role during 
their deliberations, giving them all of their instructions. They agree that the contract manager sat 
silently, apart from reading the references and answering one or two questions. There is 
therefore no evidence, except for reading the references, that she influenced their discussions in 
any way. 



Attachment III 
Page 6 of 6 



Finance Committee, Board of Supervisors 
January 31", 2001 



Bilingual Staff. This is not really an issue of procedure. The RFP required as a minimum 
qualification that proposers must be able to "demonstrate that they have adequate staff "on 
board" as of the time of its bid, who are bilingual," that they have access to interpreters, and that 
"both on and off site staff demographics reflect the ethnically diverse patient population served 
by DPH." Panel members and DPH staff are satisfied that both proposals met these 
requirements. After reviewing the proposals, HRC concurs with this opinion. 

Price Negotiations. It was entirely normal and acceptable procedure for DPH to include the 
price submitted with the proposal in its negotiations with Health Advocates. 
At that point Paralign, because it had a lower score, was, out of the picture, and had been notified 
in writing to that effect. It would have been highly unfair to allow Paralign to modify its 
proposal in any way after the completion of a selection process in which it was the loser, with the 
idea of allowing it to get back into the competition. Only if negotiations were unsuccessful with 
the highest scorer could DPH have entered into negotiations with Paralign. 

CONCLUSION 

There was general consensus among the panelists that Health Advocates submitted a superior 
proposal; In addition, DPH conducted a well organized and documented RFP process. 
However, as mentioned above, it is extremely important to avoid even the appearance of bias in 
these procurements. In this regard, HRC believes that there were several flaws in the process. 

First, none of the panel members should have had any recent dealings with either proposer. 
Second, the partial reference checks of only one proposer should not have been given to the 
panelists. If reference checks were shared with the panelists at all, then full and complete checks 
for both the panelists should have been included. Finally, the letter of recommendation from the 
domestic partner of the CFO should not have been included in Health Advocate's proposal. 
Whether or not Health Advocates knew of the relationship, the sender must certainly have been 
aware of the conflict of interest and should have refrained. 

There is no evidence to show that these flaws influenced the outcome of the evaluation process 
in any significant way. However, HRC believes that the most equitable resolution to this RFP 
would be to convene another panel to reassess the two previously submitted proposals, removing 
the letter from the CFO's domestic partner from that of Health Advocates. 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

Item 6 - File 01-0112 



Departments: 



Item: 



Amount: 



Human Resources Department (HRD) 
Fire Department 
Police Department 
Department of Public Health (DPH) 
Department of Human Services (DHS) 
Sheriffs Department 
Department of Parking and Traffic (DPT) 
Recreation and Park Department (RPD) 
Juvenile Probation Department 

Hearing to consider the release of reserved funds for the 
following departments to fund workers' compensation 
expenses in FY 2000-2001. 

$9,410,038, as follows: 



Department 


Amount 


Department of Public Health (DPH) 




Community Health Network 


$2,309,684 


Population Health 


363.417 


Subtotal Public Health 


$2,673,101 


Fire Department 


2,122,174 


Police Department 


2,000,109 


Department of Parking and Traffic (DPT) 


724,685 


Recreation and Park Department (RPD) 


617,820 


Sheriffs Department 


501,096 


Department of Human Services (DHS) 


476,335 


Juvenile Probation Department 


294,718 


t Total Requested Release of Reserves 


$9,410,038 



Source of Funds: 



Description: 



FY 2000-2001 General Fund Budget 
for each department listed above 

During the FY 2000-2001 budget hearings, the Finance 
and Labor Committee recommended that approximately 
one third of annual workers' compensation expenditure 
budgets for the eight City departments listed in the table 
above be placed on reserve so that the Committee could 
monitor workers' compensation spending during the fiscal 
year. The table shown below contains, for each of the 
eight departments, the FY 2000-2001 budgeted amount 
for workers' compensation, the actual expenditures 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



through December 31, 2000, the projected expenditures 
through June 30, 2001, and the projected surplus or 
deficit in spending for workers' compensation spending for 
FY 2000-2001. 



Departmental General Fund Expenditures for Workers' Compensation 
through December 31, 2000* 


Department 


FY 2000- 
2001 Budget 


Actual 

Expenditures 

through 

12/31/00 


%of 
Annual 
Budget 


Projected 

Expenditures 

through June 

30, 2001 


Projected 
Surplus 
(Deficit) 


Public Health 












Community 
Health Network 


$6,929,055 


$3,081,843 


44.5% 


$6,225,323 


$703,732 


Population Health 


1,090,252 


327,044 


30.0% 


660,629 


429,623 


Subtotal 


$8,019,307 


$3,408,887 


42.5% 


$6,885,952 


$1,133,355 


Fire Department 


6,416,523 


3,017,575 


47.0% 


6,095,501 


321,022 


Police Department 


6,375,329 


3,309,274 


51.9% 


6,684,734 


(309,405) 


Recreation and Park 


1,937,923 


1,020,688 


52.7% 


2,061,790 


(123,867) 


Parking and Traffic 


2,174,055 


1,021,149 


47.0% 


2,062,722 


111,333 


Sheriffs Department 


1,394,400 


1,046,235 


75.0% 


1,727,515 


(333,115) 


Human Services 


1,459,006 


803,826 


55.1% 


1,623,728 


(164,722) 


Juvenile Probation 


884,155 


281,724 


31.9% 


569,082 


315,073 


Total 


$28,660,698 


$13,909,358 


48.5% 


$27,711,024 


5949,674 



*Actual expenditures from July 1, 2000 through 
December 31, 2000, totaling $13,909,358, were provided 
by the Workers' Compensation Division of the 
Department of Human Resources (HRD), as shown in 
Attachment I. Also provided by HRD, Attachment II 
contains projected expenditures for FY 2000-2001 for all 
General Fund and General-Fund supported departments, 
totaling $48,523,011, including $27,711,024 for the eight 
departments listed above. 

According to HRD projections, the above table indicates 
that the Public Health Department, the Fire Department, 
the Department of Parking and Traffic and the Juvenile 
Probation Department are all spending within their 
previ o usly approved FY 2000 - 2001 budg e t for work er 



compensation. 

While the Police Department, the Recreation and Park 
Department and the Department of Human Services are 
projected to end FY 2000-2001 with deficits in workers' 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

34 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



compensation, these three departments expect to cover 
such projected deficits using existing budgeted funds from 
other accounts in the departments' previously approved 
FY 2000-2001 budgets, and therefore, do not expect 
requesting supplemental appropriations for workers' 
compensation in FY 2000-2001, according to Captain John 
Goldberg of the Police Department, Ms. Mary King Gorky 
of the Recreation and Park Department and Ms. Sally 
Kipper of the Department of Human Services. 

The Sheriffs Department, however, which is also expected 
to end FY 2000-2001 with a deficit in workers' 
compensation, will most likely require a supplemental 
appropriation to fund the department's estimated deficit 
of $333,115 for FY 2000-2001, as discussed in detail 
below. 

Sheriffs Department 

As of December 31, 2000, the Sheriffs Department had 
already expended $1,046,235, or 75.0 percent, of its total 
FY 2000-2001 workers' compensation budget of 
$1,394,400 and 117.1 percent of its available, unreserved 
workers' compensation funding of $893,304 ($1,394,400 
budgeted less reserve of $501,096). Based on workers' 
compensation expenditures incurred during the first six 
months of Fiscal Year 2000-01, the Sheriffs Department 
is projected by the Department of Human Resources to 
spend an estimated total of $1,727,515 on workers' 
compensation costs during FY 2000-2001, as shown in the 
table above and in Attachment II, which is 23.9 percent or 
$333,115 more than the Department's total FY 2000-2001 
workers' compensation appropriation of $1, 394,400. * 

The Sheriffs Department attributes high workers' 
compensation spending through the first six months of FY 
2000-2001 (through December 31, 2000) to one 
extraordinary claim that was paid in November of 2000, 
which totaled $385,880, as stated in Attachment III, 
provided by the Sheriffs Department. Without this one 
extraordinary claim, the Sheriffs Department would have 



1 Attachment III, provided by the Sheriffs Department, contains a FY 2000-2001 projection for total 
expenditures for workers' compensation of $1,708,144, which is $19,371 less than HRD's projection of 
$1,727,515. Ms. Jean Mariani of the Sheriffs Department concurs with HRD's projections. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Comments: 



Recommendation: 



been within its workers' compensation budget for FY 
2000-2001, having expended $660,133 (expenditures of 
$1,046,235 less the claim of $385,880) as of December 31, 
2000, or 47.3 percent of its total workers' compensation 
appropriation of $1,394,400. 

1. It is therefore likely that the Sheriffs Department will 
require a supplemental appropriation for workers' 
compensation in FY 2000-2001 in the amount of 
approximately $333,115. 

2. In addition, at the December 20, 2000 Finance and 
Labor Committee hearing on overtime expenditures in the 
Sheriffs Department, the Budget Analyst reported that 
the Sheriffs Department would likely require a 
supplemental appropriation in FY 2000-2001 of at least 
$1,911,919 for Salaries and Fringe Benefits, including a 
projected deficit in overtime funds of $1,759,730. The 
projected deficit of $333,115 for workers' compensation 
plus the Budget Analyst's previously projected deficit of 
$1,911,919 for Salaries and Fringe Benefits, including 
overtime, is likely to result in a total estimated 
supplemental appropriation for the Sheriffs Department 
in FY 2000-2001 of $2,245,034. 

3. According to Mr. Minh Vu, Deputy Director of the 
Workers Compensation Divison at HRD, and as shown in 
Attachment II provided by HRD, total workers' 
compensation expenditures for FY 2000-2001 for all City 
departments are projected to be $54,823,445, or 
$1,416,355 less than the total FY 2000-2001 City budget 
for workers' compensation of $56,239,800 previously 
approved by the Board of Supervisors, including 
$49,021,543 budgeted for General Fund and General 
Fund supported departments. Also, as shown in 
Attachment II, total workers' compensation costs for 
General Fund and General Fund supported departments 
for FY 2000-2001 are projected to be $48,523,011, or 
$498,532 less than the total FY 2000-2001 budget of 
$49,021,543 previously approved by the Board of 
Supervisors. 

Approve the requested release of $9,410,038 in reserved 
workers' compensation funds. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Workers Compensation Division 
City and County of Sam Francisco 

DEPARTMENT OF HUUAN RESOURCES 




Attachment I 
Page 1 of 4 

Voice (415) 575-560Q 

TDD (415) 575-5624 

Fax Claims (415) 575-5552 

Fax Administration (415) 575-56 13 



MEMORANDUM 



TO: Finance and Labor Committee Members 

FROM: Minn Vu, Deputy Director \wS\J 

DATE: January 30, 2001 

SUBJECT: Request to Release Reserve on Workers' 

Compensation Funds 



Recommended Action 

Release the reserve on the workers' compensation funds in the 2000- 
2001 budget for eight departments - Fire, Police, Public Health, 
Human Services, Sheriff, Parking and Traffic, Juvenile Court, and 
Recreation and Parks. 



Background 

As part of its deliberations on the FY 2000-2001 budget, the Finance 
and Labor Committee reserved a portion (approximately one-third) of 
the workers' compensation budget for eight departments. Based on 
current spending rate, we project that this reserve will be needed to 
cover expenditures for the remainder of this fiscal year. Therefore, we 
are requesting release of the reserve. 



30 VAN NES3AveSU£. SUITS 3300 San ffu^oscs, CA 9*102-0027 



Attachment I 
Page l ot k 



nequesc to Keiease reserve on wor*ers coaipeiibouuii runus 
January 30, 2001 
Page 2 



Analvsis/Reasop for Recommendation 

Through the end of December 2000, workers' compensation 
expenditures for most departments are in pace with budget. For all 
General Fund and General Fund supported departments, expenditures 
for the first half of the fiscal year are 49% of the annual budget. For 
six of the eight departments whose workers' compensation budgets 
were partially held in reserve, expenditures for the first half of the 
fiscal year range from 43% to 55% of annual budget. Juvenile Court 
to date only spent 32% of its annual workers' compensation budget, 
but Juvenile Court's budget is relatively small and therefore subject to 
fluctuations In expenditures. The Sheriff's Department, on the other 
hand, has already spent 75% of its annual budget due to one 
extraordinary claim pay out of $385,880 In the second quarter (this 
claim has now been closed), and will need to request a supplemental 
appropriation of funds even if reserve is released. 

Workers' Compensation Reserves 



Department 


1999-2000 
Expenditures 


2000-2001 
Budget 


Reserved 


Expenditures 1 

as of 

12/31/00 


Percent 

of 
Annual 
Budget 


Fire 


$6,793,359 


$6,416,523 


$2,122,174 


S3, 017, 575 


47% 


Police 


5,906,704 


6,375,329 


2.000. 1C9 


3.309.274 


52% 


Human Services 


1,324,407 


1.459,006 


476,335 


803.826 


55% 


Juvenile Probation 


761,278 


884,155 


294,718 


281.724 


32% 


Parkina St Traffic 


1,978,703 


2.174,055 


724,685 


1.021,149 


47% 


Recreation & Park 


2.235.240 


1,937.923 


617,820 


1.020.638 


53% 


Sheriff 


1.421.642 


1,394,400 


501,096 


1,046.235 


75% 


Public Health 

-General Hospital 
-Laguna Honda 
-Primary Care & Forensics 
-Population Health 

Total 


§3,222,711 

2,898,258 

560,905 

1,140,927 

7,822,801 


3,466,402 

2,836,045 

626,608 

1,090,252 

8.019,307 


1,155,467 
945,348 
■208,869 
353,417 

2,673.101 


1,515,427 

1,309,592 
256,724 
327,044 

3.408.&&7 


44% 
46% 
41% 
30% 

43% 


LTotal 8 Deoartments 


1 S2S,090,723 


1 $23,660,698 


1 S9.4lQ,G38 


1 S13.SC9.353 


49% 


Total all General Fund 
and General Fund 

i Suooorted Deoartments 


1 $-18,797. 545 


S49.02l.543 


$9,410,033 


S24.2ll.147 


49% 



Attachment I 
Fage J ot 4 

Request to Release Reserve on Workers' Compensation Funds 

January 30, 2Q01 

Page 3 



Many changes are being implemented this fiscal year to better control 
workers' compensation costs and improve services. The Workers' 
Compensation Division is under new management effective August 
2000. Some major changes being implemented by new management 
are: 

♦ Transitioning to a new claims administration contract effective May 
1, 2001 

♦ Converting to a new claims management information system 
effective May 1, 2001 

♦ Re-engineering claims administration process to follow industry 
"best practices" approach 

♦ Expanding medical provider networks to achieve higher savings on 
medical costs 

♦ Conducting a needs analysis for a risk management information 
system to improve quality of data collection and analysis. 

These changes, together with renewed emphasis by City departments 
on transitional work programs and other cost control efforts, are 
holding down costs while improving services. After significant cost 
increases in the past several years, this fiscal year's workers' 
compensation costs for the entire City are projected to be below last 
year's level based on actual expenditures for the first six months, 
absent an extraordinary or catastrophic event in the second half of the 
fiscal year. 



City and County of San Francisco 

Workers' Compensation Expenditures All Departments 

Six-month Expenditure Comparison 

1999-2000 2000-2001 

July-December July-December 

Fyppndirures Expenditures 

$27,650,171 $27,329,020 

Trends in Annual Expenditures 

FY96-97 97-98 98-99 99-00 QQ-Q1 (*^ 

$39,807,916 $46,294,961 $54,255,996 $55,591,559 $S4,823,445 

(*) Projected using straight-line method assuming 2% increase for second half of 
fiscal year and adjusted for one-time extraordinary claim pay out of $365,880. 



7Q 



Request to Release Reserve on worKers' compensation runus 
January 30, 2001 
Page 4 



Attachment I 
Page 4 of 4 



Consequences of Negative Action 

Without the release of this reserve, we will have insufficient funds 
available in our workers' compensation budget to cover expenditures, 
which are primarily benefit payments to our employees. Failure to 
provide these legally required workers' compensation benefits in a timely 
manner not only will negatively affect morale, it will also have other 
serious consequences including financial penalties and possible removal of 
self-insured license for the City by the California Department of Industrial 
Relations. 






Chief Paul Tabacco, SFFD 

Captain John Goldgerg, SFPD 

Trent Rhorer, DHS 

Mitch Katz, DPH 

Jesse Williams, Juvenile Probation 

Fred Hamdun, DPT 

Elizabeth Goldstein, Rec.& Park 

Ken Bruce, Budget Analyst's Office 

Erin Mc Grath, Mayor's Budget Office 

Andrea R. Gourdine, DHR 

Matthew Hymel, Controller's Office 



Christine Pagan, SFFD 

Captain Sandra Tong, SFFD 

Sally Kipper, DHS 

Monique Zmuda, DPH 

Ed Lopatin, Juvenile Probation 

Julia Dawson, DPT 

Jeffrey Bramlett, Rec.& Park 

Emilie Neumann, Budget Analyst's Office 

Julian Low, Mayor's Budcet Office 

William Lee, DHR 

Michele Olson, Board of Supervisors 



An 



TQT«_ P. 66 



Attachment II 
Page 1 of 2 



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I IH 


li- 







A 9 



Attachment II I 
Page 1 of 2 



y and County of San Francisco /^p^S^ 



Michael Hennessey 



r ICE OF THE SHERIFF fef €mmmt XA sheriff 



415 - 554- 7225 




MEMORANDUM 

Reference 01-007 

TO: Finance and Labor Committee Members 

FROM: Michael Hennessey, Sheriff 

DATE: January 2, 2001 (Revised January 23, 200i; 

SUBJECT: Request to Release Reserve on Workers Compensation 
Funds 

Recommended Action 

Release the reserve on $501,096 of the Sheriff's Department workers 
compensation funds in the 2000-01 budget. 

Background 

As part of your committee's deliberations on the Sheriff's Department's 
2000-01 budget, you reserved $501,096 of our total workers 
compensation budget of $1,394,399. Based on our current spending 
rate, we project that we will have exhausted the funds currently 
available by the second quarterly billing. Therefore, we are requesting 
release of the reserve. 

Analysis/Reason for Recommendation 

Through the end of December, 2000, with the exception of one claim, 
workers compensation expenditures for the Sheriff's Department 
totaled $661,132, or approximately $110,189 per month, for projected 
spending of $1,322,268, or approximately 5% less than our budget of 
$1,394,399. However, in November, there was an extraordinary claim 
that totaled $385,880, which brings total projected spending for the 
year to $1,708,144, and requires that we request this release in 



Attachment II I 
Page z or z 



Sheriff's Department 

January 2, 2001 (Revised January 23, 2001) 

Page 2 



January, 2001, to have sufficient funding to pay this extraordinary 
claim as well as our second quarter workers compensation 
expenditures. We plan to submit a supplemental appropriation request 
in the spring to address this extraordinary, unbudgeted claim. 

Fiscal Implications : 

Working with the Mayor's Office, we established our 2000-01 workers 
compensation budget based on expenditure rates experienced in 1999- 
2000. As shown above, without the extraordinary claim, we would be 
within our workers compensation budget for this fiscal year. 

We do not make a practice of including such large claim settlements in 
our regular budget because the amount is usually not predictable, 
relying on several possible outcomes. Instead, we believe it more 
prudent to budget a reasonable expenditure rate and request a 
supplemental appropriation if and when a large claim occurs. 

The Workers Compensation Division previously projected the Sheriff's 
Department would end the year with a deficit in its workers 
compensation account of $0.8 million based on a straight-line 
projection including this extraordinary claim. We believe that, except 
for this claim, and presuming no other large settlements, the shortfall 
in this account would be no more than the amount of the claim, that 
is, $385,880, based on expenditures through November 2000. 

Consequences of Negative Action : Without the release of this 
reserve, we will have insufficient funds available in our workers 
compensation budget to cover the second quarter billing from the 
Workers Compensation Division. 

If you have any questions or comments, please contact Jean Mariani at 
(415) 554-4316. 

cc: Gloria Young, Clerk of the Board 

Mary Red, Clerk, Finance and Labor Committee 
Steve Kawa, Mayor's Office 
Edward Harrington, Controller 
Harvey Rose, Budget Analyst 



44 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

Items 7. 8. and 9 - Files 01-0150. 00-0276. and 01-0149 

Note: An earlier version of the proposed ordinances (Files 00-0276 and 01- 

0149) was considered under File 99-1304, and an earlier version of the 
proposed resolution adopting the final negative declaration (File 01- 

0150) was considered under File 99-1307. Both of these earlier 
versions of the subject legislation were continued at the February 9, 
2000 meeting of the Finance and Labor Committee. 

Departments: Department of Building Inspection (DBI) 

Mayor's Office of Housing (MOH) 
Planning Department 

Item: File 01-0150 

Resolution adopting final negative declaration, finding 
and determining that the Jobs-Housing Linkage 
Ordinance will have no significant impact on the 
environment, and adopting and incorporating findings of 
final negative declaration. 

File 00-0276 

Ordinance amending Article III, Chapter II, Part II of the 
San Francisco Municipal Code (Planning Code) by 
amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5, 
313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12, 313.13, 
and 313.14, to rename the "Office Affordable Housing 
Production Program" as the "Jobs-Housing Linkage 
Program," to apply the program to all new and expanded 
hotel space of at least 25,000 square feet, to all new and 
expanded entertainment space of at least 25,000 square 
feet, to all new and expanded retail space of at least 
25,000 square feet, and to all new and expanded research 
and development space of at least 25,000 square feet; to 
set forth the number of affordable housing units to be 
constructed for each type of development subject to this 
ordinance; to increase the number of affordable housing 
units and fees for office developments; and by adding 
Section 313.15 to require a study every five years 
determining the demand for housing created by 
commercial development. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

File 01-0149 

Ordinance amending Article III, Chapter II, Part II of the 
San Francisco Municipal Code (Planning Code) by 
amending Sections 313, 313.1, 313.2, 313.3, 313.4, 313.5, 
313.6, 313.7, 313.8, 313.9, 313.10, 313.11, 313.12, 313.13, 
and 313.14, to rename the "Office Affordable Housing 
Production Program" as the "Jobs-Housing Linkage 
Program," to apply the program to all new and expanded 
hotel space of at least 25,000 square feet, to all new and 
expanded entertainment space of at least 50,000 square 
feet, and to all other new and expanded retail space of at 
least 100,000 square feet; to set forth the number of 
affordable housing units to be constructed for each type of 
development subject to this ordinance; to set forth fees 
for each type of development subject to this ordinance; to 
increase the number of affordable housing units and fees 
for office developments; and by adding Section 313.15 to 
require a study every five years determining the demand 
for housing created by commercial development. 

Description: The current Office Affordable Housing Production 

Program was established in 1985 under Planning Code 
Section 313. This program linked the development of 
office buildings to the demand for affordable housing by 
requiring that the developers of offices over 50,000 square 
feet either build affordable housing or pay an in lieu fee. 
A 1990 amendment to the Planning Code reduced the 
threshold size for office developments from 50,000 to 
25,000 square feet. Therefore, the current ordinance 
requires developers of office space which meet or exceed 
the 25,000 square feet threshold to either: 

• Build one affordable housing unit for every 6,250 
square feet of new and expanded office space 
constructed. This represents 16 affordable housing 
units for every 100,000 square feet of new and 
expanded office space constructed; or 

• Pay an in lieu fee of $7.05 for each square foot of new 
and expanded office space constructed to the Citywide 
Affordable Housing Fund in lieu of building affordable 
housing units. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

46 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

The two proposed ordinances (Files 00-0276 and 01-0149) 
would extend the Office Affordable Housing Production 
Program, to be renamed the "Jobs-Housing Linkage 
Program," to also cover new and expanded hotel, 
entertainment, and retail space. Furthermore, under File 
00-0276 (but not under File 01-0149), the Jobs-Housing 
Linkage Program would also cover research and 
development space as a separate category. Table 1 below 
compares the key changes contained in these two 
proposed ordinances from the existing Office Affordable 
Housing Production Program. 

Table 1: Comparison of key changes contained in the two proposed 
ordinances 











- 














File 00-0276 




File 01-0149 




Program applies to 


Office (unchanged) 


25,000 


Office (unchanged) 


25,000 


following new and 


Hotel 


25,000 


Hotel 


25,000 


expanded spaces 


Entertainment 


25,000 


Entertainment 


50,000 


which meet, or 


Retail 


25,000 


Retail 


100,000 


exceed, the 


Research & Development 


25,000 






specified square 










footage: 










Number of 


Office (unchanged) 


16 


Office (unchanged) 


16 


affordable housing 


Hotel 


11 


Hotel 


11 


units to be 


Entertainment 


14 


Entertainment 


14 


constructed per 


Retail 


14 


Retail 


14 


100,000 sq. ft of new 


Research & Development 


20 






and expanded space 










(pro-rated): 










In lieu fee payable 


Office (current fee = $7.05) 


$11.34 


Office (current fee = $7.05) 


$10.00 


by developers 


Hotel* 


$8.50 


Hotel* 


$4.25 


instead of 


Entertainment* 


$10.57 


Entertainment* 


$5.29 


constructing 


Retail* 


$10.57 


Retail* 


$5.29 


affordable housing 


Research & Development* 


$7.55 






units, per additional 










gross sq. foot, Mar. 










11, 1999 










(retroactive) 










through Dec. 31, 










2001: 











* No fees are charged under the existing Office Affordable Housing Production Program. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 





File 00-0276 


File 01-0149 


In lieu fee per 
additional gross sq. 
foot, Jan. 1, 2002 
onwards: 


Office (current fee = $7.05) SI 4.96 
Hotel* SI 1.21 
Entertainment* $13.95 
Retail* $13.95 
Research & Development* $9.97 


Office (current fee = $7.05) $14.00 
Hotel* $4.25 
Entertainment* $5.29 
Retail* $5.29 


Fee revisions: 


To be revised annually from 
January 1, 2003. 


To be revised annually from 
November 1, 2001. 


Program does not 
apply to the 
following 1 : 


Mission Bay North and South 
development projects which are 
consistent with redevelopment 
plans and interagency cooperation 
agreements approved by the Board 
of Supervisors 2 . 

Pharmacies and grocery stores 
which would benefit areas 
underserved by such retail uses. 


Mission Bay North and South 
development projects which are 
consistent with the redevelopment 
plans and interagency cooperation 
agreements approved by the Board 
of Supervisors. 



No fees are charged under the existing Office Affordable Housing Production Program. 

Under both proposed ordinances, commercial property 
developers would be given a third mitigation payment 
option in addition to either constructing affordable 
housing or paying the in lieu fee. Commercial property 
developers would be able to contribute land, of equivalent 
value to the in lieu fee, to affordable housing developers to 
construct the specified number of affordable housing units 
on the commercial property developers' behalf 3 . However, 



1 The existing ordinance exempts commercial property developments on land which is owned by 
Federal or State governments, or which is under the jurisdiction of the San Francisco Redevelopment 
Agency or the Port Authority. Both of the proposed ordinances would further exempt Mission Bay 
redevelopment projects under certain circumstances. The ordinance under File 00-0276 would 
further exempt pharmacies and grocery stores which would benefit areas underserved by such retail 
uses. 

2 According to Ms. Bauman, the Mission Bay North Redevelopment Plan and Interagency 
Cooperation Agreement were approved by the Board of Supervisors on October 26, 1998 (Ordinance 
327-98), while the Mission Bay South Redevelopment Plan and Interagency Cooperation Agreement 
were approved by the Board of Supervisors on November 2, 1998 (Ordinance 335-98). 

3 If a developer chooses to contribute land for affordable housing developments in lieu of the other 
mitigation payment options, then the value of the land must be equal to, or greater than, the in lieu 
fees otherwise payable. Therefore, both proposed ordinances would require an appraisal report, as 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

48 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 

only File 01-0149 further specifies that such land should 
be "suitable for housing use." 

The proposed final negative declaration (File 01-0150) 
was adopted on April 27, 1999 by the Planning 
Commission which found that there was no substantial 
evidence that an extended Jobs-Housing Linkage 
Program would have a significant impact on the 
environment. 

Comments: 1. Developers of new office space larger than 25,000 

square feet are required under the existing Office 
Affordable Housing Production Program to either (a) 
construct a specified number of affordable units 
themselves, or (b) pay a fee of $7.05 per square foot to the 
Citywide Affordable Housing Fund in lieu of building 
affordable housing 4 . The in lieu fee was set at $7.05 in 
1994 and has not been increased since that time, despite 
the existing law's provision permitting the Planning 
Department to impose increases of up to 20 percent 
annually based on increases to the Average Area Purchase 
Price Safe Harbor Limitations for New Single-Family 
Residences for the San Francisco Primary Metropolitan 
Statistical Area (PMSA), published by the Internal 
Revenue Service. In the event that the Internal Revenue 
Service does not adjust its PMSA statistics within a 14- 
month period, the current ordinance allows the Planning 
Commission to authorize a study for adjusting the last 
published Internal Revenue Service figure, to be effective 
until the Internal Revenue Service revises its PMSA 
statistics. Since the Internal Revenue Service has not 
published an update to its report since 1994, the Mayor's 
Office of Housing has contracted with private experts to 
obtain average area purchase price analyses for the San 
Francisco PMSA in 1998 and 2000. The 2000 report, 
prepared by Vernazza Wolfe Associates, indicates a 73.3 
percent increase in purchase price figures for new 



defined by the Uniform Standards of Professional Appraisal Practice, to be prepared by a Member of 
the Appraisal Institute, which determines the fair market value of any land being contributed. 
4 The in lieu fee is payable to the Planning Department prior to the Department of Building 
Inspection issuing the first building permit for a new development. Therefore, the in lieu fee must 
be paid before any construction can begin. If, during construction, the type or square footage of a 
development changes, then the developer must go back to the Planning Department and the 
Department of Building Inspection for consideration of the change. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



construction during the five-year period between 1994 
and 1999. If the in lieu fee for new and expanded office 
space had also been increased by 73.3 percent, it would 
now be $12.22 per square foot. 

2. According to Mr. Costolino Hogan of the Planning 
Department, the $7.05 fee has not been increased since 
1994 because the Planning Department has not 
considered the matter. Both Mr. Hogan and Mr. Joe 
LaTorre of the Mayor's Office of Housing note that the 
City's real estate market was flat in the period between 
1994 and 1998. Mr. LaTorre states that by 1998, when 
the real estate market was rising in cost and the Internal 
Revenue Service had not issued new PMSA statistics, the 
MOH contracted for new statistical information which 
was made available to the Planning Department. 

Office, Hotel, Entertainment, and Retail Space 

3. Under the two proposed ordinances (Files 00-0276 
and 01-0149), the Jobs-Housing Linkage Program would 
be extended to cover development of the following new 
and expanded spaces: 

(a) Hotel spaces 25,000 square feet or more. 

(b) Entertainment spaces either 25,000 square feet or 
more (File 00-0276), or 50,000 square feet or more 
(File 01-0149). 

(c) Retail spaces either 25,000 square feet or more (File 
00-0276), or 100,000 square feet or more (File 01- 
0149). 

Neither of the proposed ordinances would apply to 
commercial property developments which construct less 
space than the square footage thresholds specified above. 

4. According to Ms. Catherine Bauman of the Planning 
Department, most office developers currently choose to 
pay the in lieu fee, rather than build the required number 
of affordable housing units. Mr. LaTorre states that the 
in lieu fee revenue is held in the Citywide Affordable 
Housing Fund administered by the Planning Department 
which provides loans to affordable housing developers, 
subject to the approval of the Director of Planning, in 

BOARD OF SUPERVISORS 
BUDGET ANALYST 






Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



accordance with the existing Office Affordable Housing 
Production Program ordinance previously approved by the 
Board of Supervisors. Mr. LaTorre states that the 
Mayor's Office of Housing makes recommendations to the 
Director of Planning as to which proposed affordable 
housing developments are in conformity with the subject 
legislation and the City's overall goals for housing 
development and which, therefore, are eligible to receive 
development funds from the Citywide Affordable Housing 
Fund and other funding sources. 

5. The two proposed ordinances (Files 00-0276 and 01- 
0149) provide that equivalent numbers of affordable 
housing units would be constructed by developers to meet 
the requirements of the Jobs-Housing Linkage Program 
for new and expanded office, hotel, entertainment, and 
retail space. However, the proposed in lieu fees payable 
by developers if they choose not to construct affordable 
housing themselves differ in the two proposed ordinances, 
as shown in Table 2 below. 



Table 2: Comparison of proposed in lieu fees 





Proposed Fee 


Proposed Fee 


Percentage Difference in 




File 


File 


Fees Under File 00-0276 


Category of space 


01-0149 


00-0276 


Over File 01-0149 / 


March 11, 1999 through 








Dec. 31. 2001 








Office 


$10.00 


$11.34 


13.40 


Hotel 


$4.25 


$8.50 


100.00 


Entertainment 


$5.29 


$10.57 


99.81 


Retail 


$5.29 


$10.57 


99.81 


January 1, 2002 onwards 








Office 


$14.00 


$14.96 


6.86 


Hotel 


$4.25 


$11.21 


163.76 


Entertainment 


$5.29 


$13.95 


163.71 


Retail 


$5.29 


$13.95 


163.71 



6. Ms. Audrey Williams Pearson of the City Attorney's 
Office states that there is no precise correlation between 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

51 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



the number of affordable housing units and the in lieu fee 
levels which would be required under the two proposed 
ordinances. The level at which in lieu fees are set, and 
the differentiation between fee levels for different 
categories of space (office, hotel, entertainment, or retail), 
are policy decisions for the Board of Supervisors. 

Estimated Fee Revenues for New and Expanded 
Office, Hotel, Entertainment, and Retail Space 

7. Adoption of either proposed ordinance would result 
in increased revenues for the Citywide Affordable 
Housing Fund, or other benefits such as increased 
numbers of affordable housing units built by developers, 
or increased contributions of land or money to affordable 
housing developers. To determine the extent of such 
benefits, the Budget Analyst used construction estimates 
prepared by the Planning Department for the ten-year 
period 2000 through 2010. Ms. Bauman states that the 
estimates provided by the Planning Department are 
based on what the Planning Department estimates is (a) 
the demand for new and expanded office, hotel, 
entertainment, and retail space in the City, and (b) the 
employment demand which would result from such 
development, consistent with the Association of Bay Area 
Governments' regional employment projections through 
2010. The Planning Department estimates for the 10 
year period from Year 2000 through Year 2010 that there 
may be construction of: 

(a) Approximately 9,600,000 square feet of new office 
space. 

(b) Approximately 1,200,000 square feet of new hotel 
space. 

(c) Approximately 2,400,000 square feet of new 
entertainment and retail space. 

This represents a total of 13,200,000 square feet of new 
office, hotel, entertainment, and retail space in the City 
which could be subject to the Jobs-Housing Linkage 
Program. If all 13,200,000 square feet of such office, 
hotel, entertainment, and retail space were constructed, 
then the Citywide Affordable Housing Fund would realize 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

52 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



the maximum estimated in lieu fee revenues shown in 
Table 3 below, assuming that: 

• All of the constructed square footage is in 
developments which meet the square footage 
thresholds, which are higher for some categories under 
File 01-0149. This would be somewhat more likely 
under the File 00-0276 proposal which has lower 
thresholds for new and expanded entertainment and 
retail space than the File 01-0149 proposal. 

• None of the constructed square footage falls within the 
proposed ordinances' permitted exemptions. 

• All developers would choose to pay in lieu fees instead 
of either building affordable housing themselves, or 
contributing money and land of an equivalent value to 
affordable housing developers. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Table 3: 



Estimated Revenue from Expanded Jobs-Housing Linkage Program. 
2000-2010, Based on Planning Department Estimates of New and 
Expanded Office, Hotel. Entertainment, and Retail Space 













In Lieu 


In Lieu 












Fee Total if 


Fee Total 












100% of 


if 50% of 












New Space 


New Space 






Square 


Square 




Meets 


Meets 


Space 




Footage 


Footage 


Fee 


Ordinance 


Ordinance 


Category 


Prooosed Fees 


Subtotal 


Total 


Subtotal 


Criteria 


Criteria 


File 00- 














0276 














Office 


$11.34 through 12/31/01 
$14.96 from 01/01/02 


1,920,000 
7.680.000 


9,600,000 s 


$21,772,800 
114.892,800 


$136,665,600 


$68,332,800 


Hotel 


$8.50 through 12/31/01 
$11.21 from 01/01/02 


240,000 
960.000 


1,200,000 


2,040,000 
10.761.600 


12,801,600 


6,400,800 


Enter- 


$10.57 through 12/31/01 


480,000 




5,073,600 






tainment 


$13.95 from 01/01/02 


1.920.000 




26.784.000 






/Retail 






2.400.000 




31.857.600 


15.928.800 


TOTAL 






13,200,000 




$181,324,800 


590,662,400 


File 01- 














0149 














Office 


$10.00 through 12/31/01 
$14.00 from 01/01/02 


1,920,000 
7.680.000 


9,600,000* 


$19,200,000 
107.520,000 


$126,720,000 


$63,360,000 


Hotel 


$4.25 




1,200,000 




5,100,000 


2,550,000 


Enter- 


$5.29 




2.400.000 




12.696.000 


6.348,000 


tainment 














/Retail 














TOTAL 






13,200,000 




$144,516,000 


$72,258,000 



5 Under File 00-0276, it is likely that some office space would be reclassified as "research and 
development" space which would not be subject to Proposition M office development ceilings. (See 
Comment No. 9.) 

6 Under File 01-0149, some space which would be considered "research and development" space 
under File 00-0276 would instead be covered by this proposed ordinance's expanded definition of 
office space, and would therefore be subject to Proposition M office development ceilings. (See 
Comment No. 10.) 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



The above table assumes that 20 percent of estimated 
projects would require developers to pay in lieu fees prior 
to December 31, 2001 at the lower in lieu fee rates, while 
the remaining 80 percent of estimated projects would 
require developers to pay in lieu fees at the higher in lieu 
fee rates from January 1, 2002 onwards. 

8. Therefore, the Planning Department's estimated 
increase of 13,200,000 square feet of new office, hotel, 
entertainment, and retail space in the City could provide 
maximum estimated in lieu fee revenues of $181,324,800 
under File 00-0276, or $144,516,000 under File 01-0149, a 
difference of $36,808,800 more under File 00-0276, during 
the ten-year period between 2000 and 2010. Of this 
amount, $136,665,600 under File 00-0276, or 
$126,720,000 under File 01-0149, a difference of 
$9,945,600 more under File 00-0276, would be generated 
by new office development which is already covered by the 
current ordinance. Therefore, the balance of $44,659,200 
under File 00-0276 (comprising $12,801,600 for new hotel 
space and $31,857,600 for new entertainment and retail 
space), or $17,796,000 under File 01-0149 (comprising 
$5,100,000 for new hotel space and $12,696,000 for new 
entertainment and retail space), a difference of 
$26,863,200 more under File 00-0276, would be generated 
by the proposed extension of the Jobs-Housing Linkage 
Program to cover new and expanded hotel, entertainment, 
and retail developments. 

However, due to the assumptions listed in Comment No. 
7, it unlikely that in lieu fee revenue would be as high as 
$181,324,800 under File 00-0276, or $144, 516,000 under 
File 01-0149, because it is unlikely that (a) all the 
estimated square footage would be constructed, (b) all the 
constructed space would exceed the threshold amounts, 
and (c) none of the developments would be exempted. 
Furthermore, some developers might choose to build 
affordable housing themselves, or contribute money or 
land of an equivalent value to affordable housing 
developeis, rather than pay an in lieu fee. 

As shown in Table 3, even if only 50 percent of the 
maximum estimated in lieu fee revenue was available 
during the ten-year period between 2000 and 2010, File 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



00-0276 could generate an estimated $90,662,400, while 
File 01-0149 could generate an estimated $72,258,000. 

Research and Development Space 

9. Only File 00-0276 proposes extending the Jobs- 
Housing Linkage Program to cover new and expanded 
research and development space of 25,000 square feet or 
more as a separate category. Such space is defined as 
space: 

... intended or primarily suitable for basic and 
applied research or systematic use of research 
knowledge for the production of materials, devices, 
systems, information or methods, including design, 
development and improvement of products and 
processing, including biotechnology, which involves 
the integration of natural and engineering sciences 
and advanced biological techniques using organisms, 
cells, and parts thereof for products and services, 
excluding laboratories which are defined as light 
manufacturing uses .... 

Ms. Bauman advises that the Planning Department does 
not separately collect information on the construction of 
such research and development space. Therefore, the 
Planning Department is unable to provide an estimate of 
the in lieu fee revenues based on such a category of space. 

10. By contrast, File 01-0149 proposes an expanded 
definition of office space which might include components 
of File 00-0276's proposed research and development 
space, such as computer and data processing services, 
multimedia, and research and development of any 
computer-based technology (excluding life sciences 
research and laboratories). 

Final Negative Declaration 

11. The final negative declaration (File 01-0150) was 
approved by the Planning Commission on April 27, 1999 
prior to submission of the two proposed ordinances. On 
December 6, 2000, Ms. Lisa Gibson of the Planning 
Department conducted a subsequent review of the two 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 7, 2001 Finance Committee Meeting 



Recommendation: 



proposed ordinances (Files 00-0276 and 01-0149) and 
found that they would not have immediate physical 
consequences or create substantial, unanticipated growth, 
and that individual affordable housing developments 
using Jobs-Housing Linkage Program funds or land would 
each be subject to Planning Department review of project- 
specific environmental impacts. Therefore, Ms. Gibson 
determined that the conclusions reached in the final 
negative declaration adopted and issued on April 27, 1999 
remain valid and that no supplemental environmental 
review is required. 

Approval of either of the two proposed ordinances, File 00- 
0276 or File 01-0149, and approval of the proposed 
resolution (File 01-0150), are policy matters for the Board 
of Supervisors. 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 




Harvey M. Rose 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



0.2.5 



I* 




City and County of Jjian Francisco 

Meeting Minutes 

Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: Gail Johnson 



[All Committees] 

Government Document Section 

Main Library 



Wednesday, February 14, 2001 



10:00 AM 
Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:05 a.m. 

002146 [Grant to develop a green building tool kit and support green building practices through training 
workshops] 
Supervisors Leno, Newsom 

Resolution authorizing the Department of the Environment to accept and expend a grant in the amount of 
$72,450 from the California Integrated Waste Management Board. (Environment) 
12/6/00, RECEIVED AND ASSIGNED to Public Health and Environment Committee. 
2/5/01, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cal Broomhead, Department of the 
Environment. 

RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010110 [Lease of City-owned property at 850 Bryant Street] 

Resolution authorizing and approving lease of City-owned property located on the fust floor of the Hall of 
Justice, 850 Bryant Street, to the Northern California Service League. (Real Estate Department) 
1/19/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real 
Estate Division, Administrative Services Department; Shirley Melnicoe, Executive Director, Northern 
California Service League. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



DOCUMENTS DEPT 

PEB 2 2 200) 

SAN FRANCISCO 
P UBLIC LIBRARY 



City and County of San Francisco 



Printed at 7:29 PM on 2/20/01 



Finance Committee 



Meeting Minutes 



February 14, 2001 



010111 [Lease of City-owned property at 400 McAllister Street] 

Resolution authorizing and approving lease of City-owned property located on the first floor of the Civic 
Center Courthouse, 400 McAllister Street, to the Northern California Service League. (Real Estate Department) 
1/19/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Anthony Delucchi, Director of Property, Real 
Estate Division, Administrative Services Department; Shirley Melnicoe, Executive Director, Northern 
California Service League. 
RECOMMENDED., by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010146 [Lease of property at 1360 Mission Street for DPH-Employee Assistance Program| 

Resolution authorizing a new lease of real property currently occupied by the City under the terms of an earlier 
lease at 1360 Mission Street, San Francisco, for a term of three years commencing retroactively as of July 1, 
2000 at an initial monthly rent of 58,000 per month for the Employee Assistance Program of the Department of 
Public Health. (Real Estate Department) 
1/24/01, RECEIVED AND ASSIGNED to Finance Committee 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Judy Schutzman, Department of Public 
Health; Anthony Delucchi, Director of Property, Real Estate Division, Administrative Services Department, 
Theodore Lakey, Deputy City Attorney; Steve Alms, Real Estate Department 
CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



ADJOURNMENT 



The meeting adjourned at II: 12 a.m. 



City and County of San Francisco 



Printed at 7:29 PM on ZWOl 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



CITY AND COUNTY 




OF SAN FRANCISCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 
FAX (415) 252-0461 



February 8, 2001 



TO: ^Finance Committee 

FROM: , Budget Analyst 

SUBJECT:^February 14, 2001 Finance Committee Meeting 

Item 1 - File 00-2146 

Department: 

Item: 



DOCUMENTS DEPT, 

FEB 1 4 2001 

SAN FRANCISCO 
p UBLIC LIBRARY 



Amount: 
Grant Period: 

Source of Funds: 
Required Match: 
Indirect Costs: 
Description: 



Department of the Environment 



Resolution authorizing the Department of the 
Environment to accept and expend a grant in the amount 
of $72,450 from the California Integrated Waste 
Management Board. 

$72,450 

December 1, 2000 through April 30, 2003 — 
approximately 29 months (see Comment No. 5) 

California Integrated Waste Management Board 

None (see Comment No. 1) 

Indirect costs are not allowed by the granting agency. 

In July of 1999, the Board of Supervisors adopted the 
Resource Efficient Building (REB) ordinance, which 
established a REB program and assigned a number of 
responsibilities to the Department of the Environment, 
including: (1) developing and implementing a green 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 

building training program, (2) providing information 
about green buildings to tbe public, thereby encouraging 
the adoption of resource-efficient building in the private 
sector, and (3) creating a pilot program to demonstrate 
innovative construction techniques, building materials, 
landscaping methods, and other resource-efficient 
building systems in municipal faculties. According to 
Mr. Cal Broomhead of the Department of the 
Environment, green building programs produce buildings 
that are healthier for the occupants and have less impact 
on the local and global environment than standard 
building programs. 

The subject grant would fund the development of a green 
building tool kit and support green building practices 
through a series of training workshops, as required by the 
REB ordinance. The tool kit, including a general green 
building description, resource lists, sample specification 
and contract language, and other materials, will be 
developed for City staff, as well as for businesses and the 
general public. Each of the four training workshops will 
target a specific audience, including members of the 
Bureau of Architecture and Bureau of Engineering, 
departmental green building liaisons, and REB pilot 
project teams, including project managers, architects, 
engineers and facility managers. The first two training 
workshops would be conducted in June of 2001, and the 
other two training workshops would be conducted in 
January of 2002. 

Budget: Attachment I, provided by the Department of the 

Environment, provides budget details to support the 
proposed project. 

Comments: 1. As shown in Attachment I, although matching funds 

are not required by the granting agency, the Department 
has budgeted $45,000 in its Fiscal Year 2000-2001 budget, 
as approved by the Board of Supervisors, in additional 
funding for this project. According to Mr. Broomhead, the 
Department does not expect to budget additional funds in 
future fiscal years for the proposed project. To date, none 
of the subject grant funds have been expended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

2 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



2. Of the $72,450 in subject grant funds, $450 would 
remain in the Department's budget to cover operating 
costs associated with the proposed project such as phone, 
fax, photocopying and mail, as shown in Attachment II. 
Contractual services would be provided by Global Green 
USA with the remaining grant funds of $72,000. Of the 
$72,000, $65,195 in subject grant funds would cover a 
portion of the personnel costs of developing and 
implementing the training workshops and designing the 
green tool kit. The remaining $6,805 would cover the 
operating expenses incurred by Global Green USA. As 
previously stated, $450 would remain in the Department's 
budget to cover the operating costs incurred by the 
Department, for a total of $7,255 in operating costs for the 
proposed project. 

3. Global Green USA was selected on a sole source basis 
to work with the Department of the Environment to 
design and conduct training workshops and the green 
building tool kit. Global Green USA was selected on a sole 
source basis because of their expertise in the area of 
developing and implementing green building programs. 
According to Mr. Broomhead, Global Green's involvement 
is integral to both the successful application and 
implementation of this project. The application was 
submitted by Global Green USA to the Department of the 
Environment after the Department of the Environment 
received a letter from the City Attorney's Office stating 
the following: "We conclude that the San Francisco 
Charter and Administrative Code do not require a bidding 
process to select the non-profit agency the Department 
wants to work with or to utilize that non-profit to perform 
the work that is the subject of the grant, so long as the 
grant application to the State clearly describes the 
proposed plan, including the involvement of the non- 
profit, and the State has no objection." 

4. Attachment II is a Grant Application Information 
Form, as prepared by DPH, which includes a Disability 
Access Checklist. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



5. Attachment II states that the subject grant project 
schedule is from December of 2000 through May of 2002. 
However, Mr. Broomhead reports that the subject grant 
project schedule is actually from December 1, 2000 
through April 30, 2003. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Attachment I 



Exhibit D: BUDGET ITEMIZATION 
Amended November 6, 2000 

Proposed Budget for Program Implementation Project: 
SF Environment 





Total Cost 


REB 

Program 

Funds 


Grant 
Request 


Task 1: Develop Tool Kit 








1.1: Develop and Administer "Needs" 
Survey 


S 8,854 


$4,855 


$3,999 


1.2: Analyze Survey Results 


$4,251 


$1,055 


$3,196 


1.3: Identify Existing Resources and Tool 
Kit Components for Development 


$ 9,592 


$2,095 


$ 7,497 


1.4: Develop Draft Tool Kit 


$23,403 


$7,400 


$16,003 


1.5: Develop Final Tool Kit 


$ 18,131 


$8,630 


$9,501 


Task 1 Subtotal 






$40,196 


Task 2: Develop and Conduct Training 
"Workshops 


2.1: Develop Workshops 


$24,630 


$ 7,625 


$17,005 


2.2: Conduct Workshops 


$21,334 


$ 13,340 


$ 7,994 


Task 2 Subtotal 






$24,999 


Other Costs 


Printing — Tool Kit Materials 


$2,000 




$2,000 


Graphic Design 


$2,000 




$2,000 


Workshop Materials 


$375 




$375 


Phone/Fax 


$250 




$ 250 


Postage 


$250 




S 250 


Travel 


$2,380 




$2,380 


Other Costs Subtotal 






S7?55 










TOTAL 


$117,450 


$45,000 


$72,450 



. t ■ Attachment II 

.•'," • Pa.f>e 1 of 2 

File Number: 



(Provided by Clerk of Board of Supervisors) 



Grant Information Form 

(Effective January 2000) 



Purpose: Accompanies proposed Board of Supervisors resolutions authorizing a Department to accept and 
expend grant funds. 

The following describes the grant referred to in the accompanying resolution: 

1 . Grant Title: Green Building Tool Kit and Training Workshops 

2. Department: Environment 

3. Contact Person: Cal Broomhead Telephone: (415) 554-6390, (415) 934-4802 

4. Grant Approval Status (check one): 

[ ] Approved by funding agency [X] Not yet approved 

5. Amount of Grant Funding Approved or Applied for: $72,450 

$45,000 of REB program funds are already in the Department of the Environment budget. 

6a. Matching Funds Required: SO 
b. Source(s) of matching funds (if applicable): N/A 

7a. Grant Source Agency: California Integrated Waste Management Board 
b. Grant Pass-Through Agency (if applicable): N/A 

8. Proposed Grant Project Summary: This project is designed to develop a green building tool kit and 
support green building practices through a series of training workshops. The tool kit, including 
resource lists, sample specification and contract language, and other materials, will be developed for 
City & County of San Francisco staff, as well as for businesses and residents in and beyond San 
Francisco's borders. Each of the workshops will target a specific audience such as architects, 
engineers, and departmental green building liaisons. 

9. Grant Project Schedule, as allowed in approval documents, or as proposed: 

Start-Date: December, 2000 End-Date: May, 2002 

10. Number of new positions created and funded: 

1 1 . If new positions are created, explain the disposition of employees once the grant ends? N/A 

12a. Amount budgeted for contractual services: $72,000 ($450 will remain in the Department budget to cover 
hard costs for phone, fax, photocopying and mail.) 



Attachment II 

.' • b. Will contractual services be put out to bid? No. The City Attorney has advised the Department of 
the Environment that bidding out the contractual services is not required unless bidding is 
required by the granting agency (which it does not). 

c. If so, will contract services help to further the goals of the department's MBE/WBE 

requirements? N/A 

d. Is this .likely to be a one-time or ongoing request for contracting out? One-time 
13a. Does the budget include indirect costs? []Yes [X] No 

b1 . If yes, how much? $ N/A 

b2. How was the amount calculated? N/A 

c. If no, why are indirect costs not included? 

[X] Not allowed by granting agency [ ] To maximize use of grant funds on direct services 

[ ] Other (please explain): 

14. Any other significant grant requirements or comments: 

"Disability Access Checklist*** 

15. This Grant is intended for activities at (check all that apply): 

[ ] Existing Site(s) [ ] Existing Structure(s) [X] Existing Program(s) or Service(s) 

[ ] Rehabilitated Site(s) [ j Rehabilitated Structure(s) [ ] New Program(s) or Service(s) 

[ ] New Site(s) [ ] New Structure(s) 

16. The Departmental ADA Coordinator and/or the Mayor's Office on Disability have reviewed the proposal 
and concluded that the project as proposed will be in compliance with the Americans with Disabilities Act and 
all other Federal, State and local access laws and regulations and will allow the full inclusion of persons with 
disabilities, or will require unreasonable hardship exceptions, as described in the comments section: 

Comments: 



Departmental or Mayor's Office of Disability Reviewer:_ 
Date Reviewed: 



(Name) 



Department Approval: Francesca Vietor Director 




Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 

Item 2 -File 00-0110 

Departments: 



Item: 



Location: 



Lessor: 



Lessee: 



Administrative Services Department 
Real Estate Division (RED) 

Resolution authorizing and approving a new lease of City- 
owned space located on the first floor of the Hall of 
Justice, 850 Bryant Street, to the Northern California 
Service League. 

Room 106 and Room 116 of the Hall of Justice building 
located at 850 Bryant Street. 

City and County of San Francisco 

Northern California Service League 



No. of Sq. Ft. and 
Cost Per Year Payable 
by the Lessee to the 
City: 

Purpose of Lease: 



Term of Lease: 



Right of Renewal: 



621 sq. ft. at $1.00 per year. 

Space for the Pre-release Program, which provides social 
services for jail inmates, and for a Children's Waiting 
Room for children whose parents have business with the 
Superior Court. The Northern California Service League 
currently occupies the subject 621 sq. ft. of City-owned 
space at 850 Bryant Street on a month-to-month basis. 

March 1, 2001 through February 28, 2002 (one year) 

The lessee has 9 consecutive one-year options to extend 
the term of the lease. 



Utilities Provided 
By Lessor: 

Janitorial Services 
Provided by Lessee: 



Description: 



The City will pay for all utilities. 



The lessee will be responsible for janitorial services 
within their leased space. 

The proposed resolution would authorize a one year lease 
of the 294 sq. ft. of Room 106 and the 327 sq. ft. of Room 
116, for a total of 621 sq. ft. of City-owned space at the 
Hall of Justice, to the Northern California Service 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



League. The Northern California Service League is a 
nonprofit organization that provides services to persons 
in, and recently released from jail or prison. The Northern 
California Service League has occupied Rooms 106 and 
116 in the Criminal Courthouse at the Hall of Justice 
since 1991. As noted in the Attachment provided by the 
Real Estate Division, the Northern California Service 
League occupied the subject two rooms from 1991 to 1997 
under two separate leases. According to Ms. Carla Lieske 
of the City Attorney's Office, since the termination of the 
two leases in 1997, under State Common Law the 
Northern California Service League has continued to 
occupy the subject rooms on a holdover basis under the 
provisions of the old leases. The Northern California 
Service League has paid the City $1.00 per year in rent 
for the subject space since 1991. The proposed lease would 
authorize the lease of the same space in Rooms 106 and 
116 of the Hall of Justice to the Northern California 
Service League under one new consolidated lease. 

The Northern California Service League operates both the 
Pre-release Program in Room 106 consisting of 294 sq. ft. 
and the Children's Waiting Room in Room 116 consisting 
of 327 sq. ft. The Pre-release Program provides 
educational programs, parenting classes, and counseling 
for jail inmates. The Pre-release Program has three staff 
members, including an Administrator and two 
Counselors, and approximately 10 volunteers. Ms. Jean 
Medlar of the Real Estate Division reports that most of 
the Pre-release Program activities with inmates take 
place in the City's jails. The Children's Waiting Room is a 
childcare center for children whose parents have business 
with the Superior Court. The Children's Waiting Room 
has two staff members, one Coordinator and one 
Assistant, who provide childcare to a maximum of 8 
children at any given time. Ms. Medlar reports that the 
Children's Waiting Room is open for use between the 
hours of 8:30 a.m. to 12 p.m., and 1 p.m. to 4:30 p.m., 
Monday through Friday, on days when the Superior Court 
is in session. According to Ms. Medlar, the Children's 
Waiting Room is available for use by persons using the 
Superior Court (such as family court clients, criminal 
defendants and jurors), at no charge, but is not available 
as a permanent childcare facility for court employees. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



Comments: 



1. According to Ms. Medlar, the 621 sq. ft. of space at the 
Hall of Justice has a fair market value of approximately 
$3.75 per sq. ft. per month, totaling $27,945 in rent per 
year. Ms. Medlar states that because the Pre-release 
Program and the Children's Waiting Room provide a 
public benefit to the City, the rent for the subject 
properties paid by the Northern California Service 
League to the City is $1.00 annually, the same rent which 
the Northern California Service League has paid the City 
since 1991. 



Recommendation: 



2. Item 3, File 01-0111, of this report to the Finance 
Committee pertains to another lease of City-owned 
property to the Northern California Service League for a 
Children's Waiting Room in the Civic Center Courthouse. 

Approval of the proposed resolution is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

10 



Attachment 



City and County of San Francisco 




Real Estate Division 
Administrative Services Department 



MEMORANDUM 

February 6, 2001 



TO: 



FROM: 



SUBJECT: 



Harvey M. Rose 

Budget Analyst, Board of Supervisors 



Anthony J. DeLucc 
Director of Propei 




History of Leases to Northern California service League 
For Children's Waiting Room and Pre-release Program 



On 1/29/91, Northern California Service League leased two rooms located on the main floor of the 
Hall of Justice at 850 Bryant Street from the City and County of San Francisco, authorized by 
Ordinance Numbers 20-91 and 21-91. Each room was given a separate lease under the same terms 
and conditions. These leases were for room 106, the Children's Waiting Room, and room 116, the 
Pre-release Program. The courts had requested that such programs be established. Due to the 
public benefit that these programs offer, each room was leased at the below market rate of SI per 
annum for a two year period, with two additional two year extensions. At the expiration of both 
lease extensions in 1997, their service to the City and County of San Francisco continued on a 
month-to-menth basis. 

Northern California Service League and the Civic Center Courthouse arranged to provide space for 
a Children's Waiting Room in room 111 at 400 McAllister Street. This was recently brought to our 
attention. 

Many lease provisions apply to the building in which the rooms are located. It would be redundant 
to give separate leases to a tenant who leases multiple rooms in a single building. Therefore, we are 
proposing that Northern California Service League be given one lease for each building. We 
propose that one lease for room 111 in the Civic Center Courthouse and one for rooms 106 and 116 
in the Hall of Justice be given. 

If you need additional information, please call Jean Medlar at 554-9887. 



cc Anna Weinstein, Associate Budget Analyst 



(415)554-9850 
PAX: (415) 552-9216 



Off lea of the Director of Property •uMWLwsAKnLo.-cuiMHCJcxv ***!!»•»*■ 

25 Von Naaa Avinut, Suits 400 San Francisco, 94102 



11 



TOTAL P. 02 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



Item 3 - File 00-0111 
Departments: 

Item: 



Location: 



Lessor: 



Lessee: 



Administrative Services Department 
Real Estate Division (RED) 

Resolution authorizing and approving a new lease of City- 
owned space located on the first floor of the Civic Center 
Courthouse, 400 McAllister Street, to the Northern 
California Service League. 

Room 111 of the Civic Center Courthouse located at 400 
McAllister Street. 

City and County of San Francisco 

Northern California Service League 



No. of Sq. Ft. and 
Cost Per Year Payable 
by the Lessee to 
the City: 

Purpose of Lease: 



Term of Lease: 



Right of Renewal: 



Utilities Provided 
By Lessor: 

Janitorial Services 
Provided by Lessee: 



Description: 



1,760 sq. ft. at $1.00 per year. 

Space for a Children's Waiting Room for children whose 
parents have business with the Superior Court. The 
Northern California Service League has currently 
occupied the subject 1,760 sq. ft. of City-owned space at 
400 McAllister Street without any type of lease 
agreement in place since 1998. 

March 1, 2001 through February 28, 2002 (one year) 

The lessee has 9 consecutive one-year options to extend 
the term of the lease. 



The City will pay for all utilities. 



The lessee will be responsible 
within their leased space. 



for janitorial services 



The proposed resolution would authorize a one year lease 
of 1,760 sq. ft. of City-owned space in Room 111 at the 
Civic Center Courthouse to the Northern California 
Service League. The Northern California Service League 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 

is a nonprofit organization that provides services to 
persons in, and recently released from jail or prison. The 
Northern California Service League has occupied Room 
111 in the Civic Center Courthouse since 1998. According 
to Ms. Jean Medlar of the Real Estate Division, since 
1998, the subject property has been occupied without any 
type of lease agreement, and no rent has been charged to 
the Northern California Service League by the City to 
date. According to Mr. Gordon Park-Li of the Trial Courts, 
there is presently no authority for the Northern 
California Service League occupying this space without 
an agreement in place and with no rental charge being 
paid to the City. 

The Northern California Service League operates the 
Children's Waiting Room in Room 111 of the Civic Center 
Courthouse. The Children's Waiting Room is a childcare 
center for children whose parents have business with the 
Superior Court. The Children's Waiting Room has two 
staff members, one Coordinator and one Assistant, who 
provide childcare to a maximum of 15 children at any 
given time. Ms. Medlar reports that the Children's 
Waiting Room is open for use between the hours of 8:30 
a.m. to 12 p.m., and 1 p.m. to 4:30 p.m., Monday through 
Friday, on days when the Superior Court is in session. 
According to Ms. Medlar, the Children's Waiting Room is 
available for use by persons using the Superior Court 
(such as family court clients, criminal defendants and 
jurors), at no charge, but is not available as a permanent 
childcare facility for court employees. 

Comments: 1. According to Ms. Medlar, the 1,760 sq. ft. of space at 

the Civic Center Courthouse has a fair market value of 
approximately $3.25 per sq. ft. per month, totaling 
$68,640 in rent per year. Ms. Medlar states that because 
the Children's Waiting Room provides a public benefit to 
the City, the rent for the subject property to be paid by 
the Northern California Service League to the City will be 
$1.00 annually. 

2. Item 2, File 01-0110, of this report to the Finance 
Committee pertains to another lease of City-owned 
property to the Northern California Service League for a 
Children's Waiting Room in the Hall of Justice. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

13 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 

Recommendation: Approval of the proposed resolution is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

14 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



Item 4 - File 01-0146 
Department: 

Item: 



Location: 
Purpose of Lease: 



Lessor: 

Lessee: 

No. of Sq. Ft. and 
Cost Per Month: 



Cost: 

Increase in Cost: 



Department of Public Health (DPH) 

Department of Administrative Services, Real Estate Division (RED) 

Resolution authorizing a new lease of space currently 
occupied by the City on a month-to-month basis under the 
provisions of a prior lease at 1360 Mission Street for a term 
of three years commencing retroactively to July 1, 2000 at an 
initial monthly rent of $8,000 per month for the Employee 
Assistance Program of the Department of Public Health 

1360 Mission Street, fourth floor 

To provide space for the Department of Public Health's 
Employee Assistance Program, which has been located in the 
same space at 1360 Mission Street since 1990. The Employee 
Assistance Program is currently on a month-to-month lease 
as set forth in a holdover provision in the prior lease. The 
Employee Assistance Program provides counseling to City 
employees on personal issues affecting their ability to work. 

VILO Properties, Inc. 

City and County of San Francisco 



2,911 square feet at approximately S2.75 per square foot per 
month. The rent would be subject to an annual increase of 
five percent each year over the three-year term of the lease. 

$8,000 monthly, or $96,000 annually 

Under the prior lease, which expired July 1, 2000, the City 
paid a monthly rent of $3,847, or $46,164 annually. That 
lease agreement contained a provision stating that rent 
during a month-to-month holdover period would be charged 
at 150 percent of the previous rent. Thus, the rent increased 
as of June 30, 2000 from approximately $3,847 per month, or 
$1.32 per square foot per month to $5,770 per month or $1.98 
per square foot per month, or 150 percent of the prior rental 
rate. The City has been paying this increased rental rate of 
$3,847 per month since July 1, 2000. Under the proposed 
lease, the rent would increase by an additional $2,230 per 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

15 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



Term of Lease: 

Utilities and 

Janitorial 

Services: 

Right of Renewal: 



Source of Funds: 



Description: 



Comments: 



month or $0.77 per square foot, or by 38.6 percent, from the 
previous holdover rent of $5,770 per month, or $1.98 per 
square foot, to $8,000 per month, or $2.75 per square foot. 
The prior 10 year and two month lease began on April 1, 
1990 and ended June 30, 2000. 

July 1, 2000 through June 30, 2003 (three years). 



Landlord to pay for all utilities and services. 

Two three-year options to renew after the expiration of the 
initial term of the three-year lease, with the rent to be set at 
95% of the market rate 1 . 

DPH's FY 2000-2001 budget, as previously approved by the 
Board of Supervisors. 

According to Ms. Judy Schutzman of DPH, the proposed 
leased premises would continue to be occupied by a total of 
six staff members of the DPH Employee Assistance Program. 
These six staff members provide free individual and group 
counseling to employees of the City and County of San 
Francisco for personal issues that effect their ability to work. 
Counseling includes topics such as communication and 
conflict resolution, anger management, stress management, 
separation and divorce, balancing work and family issues, 
and dealing with difficult people. 

1. According to Ms. Schutzman, approximately 30 percent or 
873 of the 2,911 square foot office at 1360 Mission Street is 
made up of individual and group counseling areas used to 
service clients of the Employee Assistance Program. 
Additionally, the Employee Assistance Program currently 
employs one full time consultant, and typically has between 
one and four interns working at 1360 Mission space at any 
given time. The balance of approximately 70 percent or 2,038 



1 The prevailing market rate would be determined pursuant to a provision in the subject proposed 
lease that would require that (1) the landlord propose a rate as the prevailing market rate, (2) the 
City make a counter-proposal if the proposed rate is not agreeable, (3) if no agreement is reached, 
both parties meet no less than twice to attempt to resolve any disagreement, and (4) if disagreements 
are not resolved, both parties participate in a process to select a neutral appraiser, whose appraisal 
would then be considered the prevailing market rate. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



square feet of space is typically occupied by eight to 11 
employees, providing an average of approximately 185 to 255 
square feet per employee. 

2. Mr. Alms advises that since the proposed rental rate of 
$2.75 per square foot was negotiated in October of 2000, the 
commercial real estate market has softened somewhat. 
However Mr. Alms advises that the proposed rental rate of 
$2.75 is still considered equal to or below current fair market 
value which Mr. Alms estimates to be approximately $3.00 
per square foot per month. Mr. Alms notes that the second 
floor (the Employee Assistance Program is located on the 
fourth floor) in the subject building at 1360 Mission Street 
rented at a rate of approximately $3.25 per square foot per 
month 2 as recently as November 15, 2000. 

3. According to Mr. Alms, the lease period would officially 
commence retroactive to July 1, 2000, approximately eight 
months prior to approval of the Board of Supervisors, 
because the landlord, VILO Properties made the retroactive 
commencement date of July 1, 2000 a condition of entering 
into the lease agreement. Mr. Alms notes that negotiations 
over the proposed new lease commenced well before the end 
of the original lease on June 30, 2000. However a final 
agreement with the landlord was only reached in January of 
2001. 

4. Under the proposed lease, the City would be required to 
pay the lessor the difference between the current monthly 
rent of $5,770 and the proposed monthly rent of $8,000, an 
increase of 38.6 percent or $2,230, retroactive to July 1, 2000. 
If the proposed lease were approved by the Board of 
Supervisors on or about March 1, 2000, the City would be 
required to pay VILO Properties a total retroactive payment 
of $17,840 ($2,230 multiplied by eight months). 

5. The proposed lease includes a provision allowing the 
landlord to terminate the lease at any time after September 
30, 2002 by providing the City with nine months notice. 
According to Mr. Alms, a real possibility exists for the 



2 According to Mr. Alms, the base rent of this space was $3.00 per square foot per month. However, 
the tenants are required to pay utilities and services in that lease, which brings the cost of occupying 
that space to a minimum of $3.25 per square foot per month, according to Mr. Alms. Under the 
subject proposed lease, the landlord would pay all utilities and services. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



Memo to Finance Committee 

February 14, 2001 Finance Committee Meeting 



Recommendation: 



landlord to exercise this termination provision, because a 
non-profit public housing company, Mercy Housing 
Corporation, owns property surrounding 1360 Mission Street, 
and has tentative plans to develop the area for low- and 
middle-income housing. Mr. Alms advises that such 
development would include the subject leased premises, if 
VILO Properties elected to sell the premises to the Mercy 
Housing Corporation. Mr. Alms notes, however, that it is his 
understanding that Mercy Housing Corporation's plans are 
currently not final, and that no development schedule has 
been developed. 

Approval of the proposed resolution is a policy matter for the 
Board of Supervisors since, without first obtaining Board of 
Supervisors approval: (a) DPH and the Real Estate Division 
are requesting approval of the proposed lease retroactive to 
July 1, 2000 and (b) such retroactivity results in the City 
being required to pay an increase of 38.6 increase in rent 
retroactive to July 1, 2000, resulting in a total estimated 
retroactive payment of $17,840 from July 1, 2000 through 
February 28, 2001. 




[arvey M. Rose 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

18 




[All Committees] 

Government Document Section 
City and County of Sian Francisco Main Library 

Meeting Minutes 

. Finance Committee wi™™™ 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 
Clerk: Gail Johnson 



Wednesday, February 21, 2001 



10:00 AM 

Regular Meeting 



City Hall, Room 263 



Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



MEETING CONVENED 

The meeting convened at 10:06 a.m. 

010039 [Airport Lease Agreement Modification for United Airlines, Inc.] 

Resolution approving Lease Modification Number Three for Lease No. 73-0066 between United Airlines, Inc. 

and the City and County of San Francisco, acting by and through its Airport Commission. (Airport Commission) 

1/2/01, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

2/7/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore Lakey, 

Deputy City Attorney; Gary Franzella, Assistant Deputy Airport Director, Aviation Management, Airport. 

Continued to February 2 1 , 2001 . 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Airport Director for 

Public Affairs. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010052 [Airport Lease Agreement for Plot 6 to United Airlines, Inc.] 

Resolution approving lease agreement for Plot 6 between United Airlines, Inc. and the City and County of San 

Francisco, acting by and through its Airport Commission. (Airport Commission) 

1/10/01, RECEIVED AND ASSIGNED to Finance and Labor Committee. 

2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

2/7/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; John Martin, Airport Director; Theodore Lakey, 

Deputy City Attorney. 

Continued to February 2 1 , 200 1 . 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Peter Nardoza, Deputy Airport Director for 
Public Affairs. 

CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



DOCUMENTS DEPT. 



PR 



B 2 2 
*■ - 

S/ W FRAN: I 
PUBLIC 



City and County of San Francisco 



Printed at 7:31 P\f on 2/22/01 



Finance Committee 



Meeting tiliutta 



February' 21, 2001 



010161 [Airport Concession Lease| 

Resolution approving the Boarding Area "F" Cosmetic and Toiletries Lease between Buth-Na-Bodhaige, Inc. 
dba The Body Shop, and the City and County of San Francisco, acting by and through its Airport Commission. 
(Airport Commission) 

1/29/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Cathy Widener, Government Affairs 
Administrator, Airport. 

Amended on line 3, after "approving, " and on line 15, after "approve, " by adding "retroactively. " 
AMENDED. 

Resolution approving, retroactively, the Boarding Area "F" Cosmetic and Toiletries Lease between Buth-Na- 
Bodhaige, Inc. dba The Body Shop, and the City and County of San Francisco, acting by and through its 
Airport Commission. (Airport Commission) 
RECOMMENDED AS AMENDED., by the following Note: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010061 [Substance Abuse and Crime Prevention Trust Fund and Designation of Lead Agency) 
Mayor, Supervisors Newsom, Maxwell, Hall, McGoldrick, Daly, Leno, Peskin 

Ordinance adding Section 10.1 17-126 of the San Francisco Administrative Code establishing fund for deposit 
of sums received under the Substance Abuse and Crime Prevention Act of 2000, and designating the 
Department of Public Health as the lead agency for administration of the fund. 
1/16/01, ASSIGNED UNDER 30 DAY RULE to Finance and Labor Committee, expires on 2/15/2001. 
2/1/01. TRANSFERRED to Finance Committee New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Monique Zmuda, Director of Finance, 
Department of Public Health; Theodore Lakey, Deputy City Attorney; Edward Harrington, Controller. 
Supervisor Peskin requested to be added as a co-sponsor. 
AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance adding Section 10.100-221 of the San Francisco Administrative Code establishing fund for deposit 
of sums received under the Substance Abuse and Crime Prevention Act of 2000, and designating the 
Department of Public Health as the lead agency for administration of the fund. 
RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010272 [Appropriation, funding for earthquake relief to El Salvador] 
Mayor, Supervisor Sandoval 

Ordinance appropriating 5100,000 from the General Fund Reserve for the Salvadorian Emergency Committee 
to provide earthquake relief for fiscal year 2000-01. 
2/12/01, RECEIVED AND ASSIGNED to Finance Committee 
Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 7i32 PM on 2A2/01 



Finance Committee 



Meeting Minutes 



February 21, 2001 



010108 [Fund the development and implementation of Reengineering Plan for the Assessor's Office Efficiency 
Program] 

Ordinance appropriating 5726,726 of the General Reserve to fund the implementation of Reengineering Plan, 
for the Assessor's Office for fiscal year 2000-01. (Assessor-Recorder) 
1/17/01, CONTINUED TO CALL OF THE CHAIR. Divided from File 002087. 
1/17/01, RECEIVED AND ASSIGNED to Finance and Labor Committee. 
2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Doris Ward, Assessor-Recorder; Debbie Liu, 
KPMG Consulting; Jim Janette, Assistant Assessor; Rubin Goodman. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



010208 [Government funding, Hetch Hetchy's power purchases] 

Ordinance appropriating $25,400,000 of Hetch Hetchy Operating Fund to fund the purchase of power to meet 
municipal and contractual obligations for fiscal year 2000-01. (Controller) 

(Fiscal impact.) 

1/31/01, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speakers: None. 
Continued to 2/28/01. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



002067 [Library Fines and Fees] 
Supervisor Newsom 

Ordinance amending the San Francisco Administrative Code by adding Section 8.21-2 to authorize the Library 

Commission to charge certain fines and fees for the use of library materials and services and ratifying prior 

fines and fees. 

1 i/20/00, ASSIGNED UNDER 30 DAY RULE to Audit and Government Efficiency Committee, expires on 12/20/2000. Sponsor 

Supervisor Kaufman 

1/2/01, RECOMMENDED AS COMMITTEE REPORT. Heard in Committee. Speakers: Susan Hildreth, City Librarian; Supervisor 

Katz; Peter Warfield. 

To Board as Committee Report January 2, 2001 . 

1/2/01 , PASSED, ON FIRST READING. Supervisor Newsom requested to be added as co-sponsor. 

1/16/01 , SEVERED FROM CONSENT AGENDA. Supervisor Yee requested this matter be severed so it could be considered separately. 

1/16/01, RE-REFERRED to Audit and Government Efficiency Committee. 

2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, Acting City Librarian; 
Dorothy Copely, Public Library; Edward Harrington, Controller; George Nichols, Finance Director, Public 
Library; James Chafee; Theodore Lakey, Deputy City Attorney; Peter Warfield; Nicole Termini; Deetje Boler; 
Michael Farrah, Legislative Assistant to Supervisor Newsom. 
Continued to 2/28/01. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 7:32 PM on 2/22/01 



Finance Committee Meeting Minutes February 21, 2001 



ADJOURNMENT 



The meeting adjourned at 1:06 p.m. 



City and County of San Francisco 4 Printed at 7:32 PM on 1/2ZV1 



T 



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*7 



A-/ 



CITY AND COUNTY 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 




OF SAN FRANCISCO 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 

FAX (415) 252-0461 



February 15, 2001 



TO: 
FROM 



Finance Committee 



- Budget Analyst 
SUBJECT: February 21, 2001 Finance Committee Meeting 

Item 1 - File 01-0039 
Note 



DOCUMENTS DEPT. 

FEB 2 2 2001 

SAN FRANCISCO 
p UBLIC LIBRARY 



This item was continued by the Finance Committee at its meeting of 
February 7, 2001. 



Department: 
Item: 

Lessor: 
Lessee: 
Term of Lease: 



Right of Renewal: 



Description: 



Airport 

Resolution approving Lease Modification No. 3 for Lease 
No. 73-0066 between United Airlines, Inc. and the City, 
acting by and through its Airport Commission. 

City and County of San Francisco 

United Airlines, Inc. 

The subject lease was first approved in 1973 for an initial 
20-year term, to expire in 1993, with two 10-year options at 
the discretion of the lessee. 

As noted above, the 20-year lease provided for two 10-year 
extensions at the discretion of the lessee, for a total lease 
period of up to 40 years. In 1993, United Airlines exercised 
its first 10-year extension, which is due to expire in 2003. 

On December 5, 2000 the Airport Commission approved 
Modification No. 3 of Lease 73-0066 between the Airport 
and United Airlines, Inc. Under lease 73-0066, United 
Airlines currently occupies 129.75 acres of land used by 
United Airlines for employee parking and its Maintenance 
Operations Center (MOC) for aircraft maintenance. The 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

subject lease was originally approved in 1973 for an initial 
term of 20 years, with two 10-year extension options at the 
discretion of the lessee. According to Ms. Dorothy Schimke 
of the Airport, in 1993 United Airlines exercised its first 
ten-year option, which is due to expire on June 30, 2003. 
The property leased by United Airlines is located at the 
intersection of San Bruno Avenue and the Bayshore 
Freeway. 

The Airport is currently developing a Multi-Modal 
Transportation Center, which includes, among other 
elements, expansion of short-term Parking Lot DD, which 
is adjacent to the property leased by United Airlines, and 
the extension of the Air Train (the Airport light rail system) 
to the Multi-Modal Transportation Center and Parking Lot 
DD (see Attachment I, provided by the Airport, for a 
description of these projects). According to Ms. Schimke, 
Parking Lot DD currently consists of Airport employee and 
Airport tenant employee parking. Ms. Schimke advises that 
Parking Lot DD will be expanded and initially used for 
additional employee parking, and upon completion of the 
Multi-Modal Transportation Center, the expanded portion 
of Parking Lot DD would be converted for long-term public 
parking. Ms. Schimke advises that in order for the Airport 
to complete such an expansion, the Airport needs access to 
Parking Lot DD through a portion of the property currently 
leased by United Airlines. Under the proposed Modification 
No. 3 to Lease 73-0066, United Airlines has agreed to 
relinquish to the Airport 0.74 acres of property. In return, 
the Airport has agreed to provide United Airlines with 
additional space of up to 2.61 acres for employee parking, 
as discussed below. 

The proposed transfer of acreage under the subject lease 
Modification No. 3 would take place in the two following 
phases: 

(1) Ms. Schimke reports that on December 1, 2000, United 
Airlines relinquished 0.74 of its total 129.75 in leased 
property back to the Airport, leaving 129.01 acres under 
the subject lease with United Airlines (see Comment No. 
2). 

(2) In exchange for relinquishing the 0.74 acres discussed 
above, the Airport agreed to provide United with 150 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

2 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Rent paid by 
United Airlines 
to the Airport: 



additional parking spaces for United Airlines employees 
that will be added to the lease at a future date, tot alin g 
a maximum of 2.61 acres. However, Ms. Schimke 
advises that the amended lease with the Airport will not 
include the additional acreage until the Airport 
completes the Multi-Modal Transportation Center and 
the AirTrain, in approximately four to six years, as 
explained in Attachment I to this report. During the 
interim period, between the time that United Airlines 
relinquished 0.74 acres of space on December 1, 2000 
and the completion of the Multi-Modal Transportation 
Center and the AirTrain Extension, the Airport has 
granted United Airlines a month-to-month permit, 
effective December 1, 2000, for approximately 2.61 acres 
to accommodate the additional employee parking. 
Because the guideway for the AirTrain will require use 
of part of the 2.61 acres, the Airport will not be able to 
determine the exact amount of additional space that will 
be added to the existing lease until the Multi-Modal 
Transportation Center and the AirTrain are completed. 
Therefore, proposed lease Modification No. 3 states that 
the Airport and United Airlines agree to expand the 
existing lease "after the Multi-Modal Transportation 
Center and the AirTrain Extension are completely 
designed and constructed... without the requirement of 
formal amendment to the Lease or the approval of any 
party... as to the dimensions and configuration of such 
space." 



Rent for the additional space to be charged by the Airport 
to United Airlines will be at the same rate of $35,879.50 
per acre charged for the existing lease, both when the space 
is under permit and after it is added to the lease. The rate 
of $35,879.50 first became effective in 1998, according to 
Ms. Schimke. 



Ms. Schimke advises that when the first 10-year lease 
extension with United Airlines was negotiated in 1993, 
United Airlines and the Airport agreed to an annual rent of 
$32,617.73 per acre for the first five years of the 10-year 
extension, with one increase of $3,261.77 to an annual rent 
of $35,879.50, effective July 1, 1998, for the remaining five 
years of the 10-year extension, expiring on June 30, 2003. 
Therefore, during the first 10-year extension between 1993 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

3 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Permit: 



Compliance with 
City Laws: 



Comments: 



and 2003, the rent charged to United Airlines will have 
increased by only approximately 10 percent, or by 
approximately an average of one percent per year. 

Under the proposed lease Modification No. 3, the exchange 
in space would result in a maximum net increase of 1.87 
acres used by United Airlines in this location (the 2.61 
acres in new parking for United Airlines employees, less 
the 0.74 acres relinquished back from United Airlines to 
the Airport). 

According to Ms. Schimke, the month-to-month permit 
granted to United Airlines for the 2.61 acres allows the 
Airport to modify or terminate the permit with 30-days 
notice. Ms. Schimke advises that since the Airport must use 
portions of the 2.61 acres under permit to United Airlines 
for construction of the AirTrain extension, the Airport will 
reduce the number of acres provided to United Airlines 
under permit as needed. 



In addition, the proposed lease Modification No. 3 would 
update the existing lease to reflect changes to the 
Administrative Code and other City requirements, such as 
provisions requiring compliance with the ban on tropical 
hardwoods and virgin redwood, the MacBride Principles 
related to employment inequity in Northern Ireland, the 
Non-Discrimination in City Contracts and Equal Benefits 
Ordinance, and the Minimum Compensation Ordinance. 

1. As previously noted, the proposed lease modification 
would ultimately result in a maximum net increase of 1.87 
acres of space for United Airlines. The net rent increase 
that the Airport would receive annually from United 
Airlines is $67,095 per year, as shown in the table below. 
However, the increased acreage to be added to the lease 
will most likely be less than the estimated 1.87 acres since 
the parking parcel now under permit will be reduced by 
AirTrain construction as described above. Ms. Schimke 
advises that the Airport will not add more than 2.61 acres 
to the lease with United Airlines. The estimated net 
increased rent of $67,095 to be paid by United to the 
Airport is shown in the table below. The net increased rent 
applies immediately to the estimated 2.61 acres provided to 
United Airlines under a month-to-month permit effective 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

4 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



December 1, 2000, as well as to the final acreage after it is 
incorporated into the existing lease. As stated previously, 
Ms. Schimke reports that the Airport expects to complete 
the Multi-Modal Transportation Center and the AirTrain 
Extension in approximately four to six years, as stated in 
Attachment I, provided by the Airport. 





Annual Cost 
per Acre 


Total 
Acres 


Annual 
Airport Revenues 


Existing Lease 


$35,879.50 


129.75 


4,655,365 


Space relinquished by 
United Airlines to 
the Airport 


$35,879.50 


(0.74) 


(26,550) 


Estimated additional space 
to be leased by 
United Airlines 


$35,879.50 


2.61 


93,645 


New Total 


131.62 


$4,722,460 


Net Increase " 


1.87 


$67,095 1 



2. As stated previously, Ms. Schimke advises that on 
December 1, 2000, United Airlines relinquished 0.74 acres 
of space leased under the existing contract. In addition, the 
Airport issued to United Airlines a permit, effective 
December 1, 2000, to use an additional 2.61 acres for 
employee parking, at which point United Airlines began 
paying additional rent to the Airport based upon the 
additional 2.61 acres. Therefore, the Budget Analyst 
recommends that the subject resolution be amended to 
provide for retroactive authorization. Ms. Schimke advises 
that the permit to United for use of the 2.61 acres will be 
terminated when the space is formally incorporated into 
the existing lease. 

3. As noted above, United Airlines will be charged rent for 
the additional 2.61 acres at the same rate of $35,879.50 per 
acre charged for the existing lease both when the space is 
under permit and after it is added to the lease. Ms. 
Schimke advises that the rate of $35,879.50 first became 
effective July 1, 1998. The Budget Analyst notes that not 
only has this rent of $35,879.50 per acre not been increased 
since July 1, 1998, or for 2.5 years, but additionally, over 
the 10-year lease extension, which expires June 30, 2003, 
the rental increases to United Airlines in total have 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

5 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

averaged approximately one percent per year over 10 years, 
or a total increase of $3,261.77, which adjusted the 1993 
rent of $32,617.73 per acre to the current rent of $35,879.50 
per acre. 

Had this rent amount been adjusted upward according to 
the total 11.24 percent increase in the Consumer Price 
Index (CPI) between July 1, 1998 and January 2001, the 
rent would have increased by $4,302.86 to an annual rent 
of $39,912.35 per acre. Furthermore, the Budget Analyst 
questions why the Airport does not require that United 
Airlines pay the Airport an adjusted rent based on current 
fair market rent for the net additional 1.87 acres to be used 
by United Airlines (the 2.61 acres in new employee parking 
for United Airlines, less the 0.74 acres relinquished back by 
United Airlines to the Airport). 

According to Ms. Schimke, the Airport agreed to the 
proposed exchange of property with United Airlines and the 
rental rate of $35,879.50 because the 0.74 acres United 
Airlines has relinquished to the Airport is critical to the 
completion of the Air Train Extension and the Multi Modal 
Center. The Budget Analyst notes, however, that the net 
additional 1.87 acres provided to United Airlines for 
employee parking is apparently important to United 
Airlines since United Airlines has requested the additional 
land from the Airport. Therefore, the Budget Analyst 
questions why the Airport does not require United Airlines 
to pay the current fair market value for the additional land 
that United will receive and why the rent being charged to 
United Airlines has only been increased by an average of 
one percent annually over the 10-year lease extension 
period, which expires on June 30, 2003. 

4. Ms. Schimke also states that the original 1973 lease with 
United Airlines contains no provisions for annual 
adjustments in rent during the initial 20-year term of the 
lease, or during each of the subsequent two 10-year 
extension periods. As discussed in Comment No. 3 above, 
the existing lease provides that before each of the 10-year 
extensions, the Airport and United Airlines will negotiate a 
revised rent based upon Airport appraisals of the land's fair 
market value at that time. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

6 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



5. In response to the Budget Analyst's report, Ms. Schimke 
advises that the Airport has negotiated the proposed lease 
Modification No. 3 to accommodate the Airport. The Airport 
went to United Airlines with the request for the Airport to 
take back from United Airlines 0.74 acres of property to 
which United had absolute rights under its long-term lease, 
according to Ms. Schimke. The Airport's providing of up to 
2.61 acres of Airport property to United Airlines, which 
would enable United Airlines to provide its employees an 
additional 150 parking spaces at the same rate of the 
existing lease, was the 'price' for United Airline's 
agreement to relinquish the 0.74 acres back to the Airport, 
according to Ms. Schimke. Ms. Schimke states that the 
Airport was not in a bargaining position to demand pricing 
concessions from United as part of this deal. Ms. Schimke 
reiterates that the 0.74 acres that the Airport will obtain 
from United Airlines is necessary for the completion of the 
Airport's Multi-Modal Transportation Center and AirTrain 
extension (light rail system). In addition to the important 
public policy goals of the Multi-Modal Transportation 
Center, according to Ms. Schimke, the Parking Lot DD 
portion of the project (see Attachment I) has significant 
revenue implications. Ms. Schimke anticipates that the 
expansion of Parking Lot DD (the expansion will initially 
be used for Airport employee parking and Airport tenant 
employee parking, and eventually for public long-term 
parking) allowed by the recapture of the 0.74 acres from 
United Airlines will generate additional parking revenues 
to the Airport conservatively estimated at $1,017,600 for 
the first full year of operation, rising to approximately $3 
million per year when the lot reaches capacity. Ms. 
Schimke advises that these parking revenues will increase 
significantly once the lot converts the Airport employee and 
Airport tenant employee parking to pub He long-term 
parking when the Multi-Modal Transportation Center is 
completed. 

6. Under the terms of the lease, not until the current 10- 
year lease extension expires on June 30, 2003 will the 
Airport, in conjunction with the Department of Real 
Estate, appraise the value of the land and negotiate with 
United Airlines a revised rent based upon the land's fair 
market value at that time, as of July 1, 2003. 

7. As previously noted, in 1993, under the first 10-year 
extension, the Airport and United Airlines negotiated an 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

7 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

adjusted rent for this first 10-year extension, effective July 
1, 1993, to increase the annual rent by $3,261.77, from 
$32,617.73 per acre to $35,879.50 per acre annually, 
effective July 1, 1998. This one and only rent increase 
represents an average increase of only one percent 
annually, or a total increase of 10 percent over the 10-year 
lease extension. This mid-term adjustment was not 
intended to reflect fair market value at mid-term, according 
to Ms. Schimke. While the Budget Analyst acknowledges 
that the 1973 original lease contained no provisions for 
annual rent adjustments, nothing precludes the Airport 
from negotiating a rent adjustment at this time, since the 
Airport is requesting approval from the Board of 
Supervisors of a proposed new lease Modification No. 3, 
which would provide United Airlines with 1.87 additional 
acres of Airport property. 

8. At the February 7, 2001 Finance Committee meeting, the 
Airport Director stated that in negotiating the proposed 
lease modification with United Airlines, the Airport took 
into consideration an additional $220,000 for security and 
related costs that United Airlines reports it would be 
required to pay to operate the additional 2.61 acres 
provided under the subject lease modification. According to 
Mr. Gary Franzella of the Airport, United Airlines reports 
that the $220,000 in additional costs would result from the 
need to provide two security guards on the premises, seven 
days a week, which would require United Airlines to 
employ six full-time equivalent (FTE) employees. 

9. At its meeting of February 7, 2001, the Finance 
Committee requested the Airport Director to attempt to 
renegotiate the proposed lease modification in order to 
require United Airlines to pay to the Airport Consumer 
Price Index adjustments and/or fair market value for the 
subject 2.61 acres. 

As of the writing of this report, according to Mr. Peter 
Nardoza of the Airport, the Airport has not yet been in 
contact with representatives of United Airlines concerning 
a possible renegotiation of this lease modification, as 
requested by the Finance Committee. Therefore, Mr. 
Nardoza is requesting that this item be continued for two 
weeks. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

8 



FEB 2 2 2001 

SAN FRANCISCO 
PUBLIC LIBRARY 



Memo to Finance Committee REVISED 2/16/01 

February 21, 2001 Finance Committee Meeting Item 1 ~ File 01-0039 
Note: Subsequent to the issuance of the Budget Analyst's report, the Airport revised the amount of the net 
revenue realized by the Airport from long term public parking spaces from their previously reported S3 1 8 
per month to S222 per month. This does not change the conclusions of the Budget Analyst. 

10. The Finance Committee also requested at its February 
7, 2001 meeting that the Budget Analyst attempt to 
determine a fair market value for the 150 parking spaces to 
be used for United Airlines employee parking in the 2.61 
acres of additional space to be provided to United Airlines 
under the proposed lease modification. 

According to the Ms. Schimke, the Airport currently 
charges $48 per parking space permit, per month, or $576 
annually, for comparable space used by airlines for 
employee parking (parking with no bus service), which the 
Airport provides to airlines on a per space permit basis. Ms. 
Schimke advises that this rate is based on the Airport's 
Rates and Charges for Airlines, which is adjusted and 
published annually by the Airport. Since the Airport can in 
some cases rent on average two permits per parking space 
(since the Airport is open 24 hours per day), the average 
monthly value of a parking space for airline employees is 
$96 per month, according to Mr. Franzella. At this rate of 
$96 per month, the total value of the 150 subject parking 
spaces would be $14,400 per month, or $172,800 annually. 
Under the proposed lease modification, based on the 
$93,645 rental revenue per year payable by United Airlines 
to the Airport for the 2.61 acres which provide United 
Airlines with 150 parking spaces, United Airlines would 
pay to the Airport an average of approximately $52.03 per 
month per parking space, or approximately $7,804 per 
month ($93,645 annually) for the entire 2.61 acres. This 
$52.03 is approximately $43.97 less per parking space per 
month ($96 less $52.03) than the average monthly rate of 
$96 per month per parking space that the Airport is 
currently charging for airline employee parking. Ms. 
Schimke advises that in addition to the 150 parking spaces, 
the subject 2.61 acres includes circulation space for 
vehicles. Under the subject lease and proposed 
modification, United Airlines would not be able to 
reconfigure the parking layout to create additional parking 
spaces, according to Mr. Franzella. 

Furthermore, based on a comparison of parking available in 
the general vicinity of the Airport, CalTrans currently 
charges on average $61 (approximately $59 to $63 per 
month) for leased paved parking spaces approximately the 
same size as the subject 150 parking spaces to be provided 

BOARD OF SUPERVISORS 

BUDGET ANALYST 
9 



idget Analyst Report] 

isan Horn 

3in Library-Govt. Doc. Section 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



to United Airlines at the Airport 1 ), according to information 
provided to the Budget Analyst by the Division of Real 
Estate. 



In addition, if the Airport were to have to dedicated the 
2.61 acre area for public parking use instead of for United 
Airlines employee parking, which in fact the Airport 
intends to eventually do in its Parking Lot DD, which is 
adjacent to the 2.61 acres being provided to United 
Airlines, then the Airport could have charged its current 
rate of $15 per day per space 2 for long-term public parking, 
or approximately $450 per month ($5,400 annually), 
according to Ms. Schimke. The Airport collects an average 
net revenue of $222 per parking space per month ($2,664 
annually) from long-term public parking, accounting for 
operating costs and fluctuations in demand, according to 
Mr. Franzella. Mr. Franzella advises that the Airport 
would not have elected to use the subject 2.61 acres for 
long-term public parking due to the property's location and 
the investment that would have been required to construct 
the infrastructure necessary for long-term parking. 

A comparison of such parking charges are as follows: 



Parking Use 


Monthly Rate 

Charged per 

Space 


Total Annual 

Rent for 

150 Spaces 


Proposed Lease Modification. 

2.61 acres including 150 parking spaces for the 
proposed rent being charged to United 


$52.03 


593,645 


CalTrans Leased Parkine Space 
in Vicinity of Airport (average rent) 
for 150 parking spaces 


S61 


S109.800 


Comparable Charges by the Airport for 

Airline Employee Parking for 150 parking spaces 
(provided per space, based on two permits each) 


$96 


$172,800 


Long-Term Airport Public Parking 

(Approximate Net Revenue for Airport 
for 150 parking spaces) 


$222 


$399,600 



1 The Real Estate Division reports that CalTrans pays a maximum of 50.20 per square foot of 
comparable paved parking, which when multiplied by the average Airport-reported 315 square-feet 
of each of the subject 150 parking spaces, would result in a monthly parking rate of S63. 

2 Ms. Schimke advises that the Airport charges for long-term parking SI for every 15 
minutes, with a maximum daily fee of $15. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

As shown in the above table: 



• Based on 150 parking spaces, the proposed $93,645 
annual rent to be charged to United Airlines under the 
proposed subject lease modification would be $16,155 
less than the approximate annual rent of $109,800 
charged by CalTrans for similar parking spaces in the 
vicinity of the Airport. 

• Moreover, according to the Airport, the annual $93,645 
rent to be charged to United Airlines under the proposed 
subject lease modification charged for the subject 150 
parking spaces under the proposed lease modification, 
including additional vehicle circulation space, would be 
$79,155 less than the $172,800 annual amount charged 
by the Airport per space (based on an average of 2 
permits per space) to airlines for permits for airline 
employee parking. 

• Further, the proposed annual rent of $93,645 to be 
charged by United Airlines under the proposed subject 
lease modification would be $305,955 less than the 
estimated $399,600 in net revenue that the Airport 
earns from 150 long-term parking places, not accounting 
for any initial investment costs which would be required 
by the Airport for long-term parking. 

11. Based on the data obtained in response to the Finance 
Committee's question concerning the value of parking 
spaces included in the proposed lease with United Airlines: 

a) under the proposed lease modification the rent charged 
to United Airlines of $52.03 monthly for each of the 150 
parking spaces would be 14.7 percent less than 
comparable parking in the vicinity of the Airport of 
approximately $61 monthly for the parking leased by 
CalTrans and 45.8 percent less than the monthly $96 
the Airport currently charges Airlines per employee 
parking space, based on an average of two permits per 
space; and, 

b) under the proposed lease modification the rent charged 
to United Airlines of $52.03 monthly for each of the 150 
parking spaces would be 76.6 percent less than the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

average $222 monthly net revenue per space that the 
Airport currently receives for long-term Airport public 
parking. 

12. The Budget Analyst based the above calculations on the 
assumption that, under the proposed lease modification, 
the United Airlines would be provided 150 new parking 
spaces, based upon information received from the Airport. 
However, the Airport now advises that United Airlines will 
receive a net total of 75 new parking spaces (the 150 
parking spaces provided in the subject 2.61 acres less 75 
parking spaces under the 0.74 acres which United Airlines 
has agreed to relinquish to the Airport under the proposed 
lease modification.) According to Mr. Franzella, the Budget 
Analyst should consider the land value of the subject 2.61 
acres based on the value of 75 parking spaces, as opposed to 
150 parking spaces. However, if a comparison of 75 parking 
spaces, instead of 150 were made, the relationship between 
the individual parking space valued in this analysis would 
remain identical. Furthermore, we disagree with Mr. 
Franzella. The analysis by the Budget Analyst addresses 
the fair market value of the new space that will now be 
leased to United Airlines that includes 150 parking spaces. 

Recommendations: 1. Amend the proposed resolution to provide for retroactive 
authorization, in accordance with Comment No. 2 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors since under the 
proposed lease Modification No. 3, the Airport will not 
receive current fair market value until July 1, 2003 and, as 
the lease presently states, the Airport does not require 
United Airlines to pay annual rent adjustments based on 
annual percentage increases in the Consumer Price Index 
(CPI) over the entire potential 40-year term of this lease. In 
addition, the fair market value rates of the parking spaces 
to be provided to United Airlines under the proposed lease 
are considerably less than comparable parking rates that 
could be received for parking as noted in Comments 10 and 
11, above. 

3. As requested by the Airport, continue this proposed 
resolution for two weeks, in accordance with Comment No. 
9 above. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

1 9 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



10. The Finance Committee also requested at its February 
7, 2001 meeting that the Budget Analyst attempt to 
determine a fair market value for the 150 parking spaces to 
be used for United Airlines employee parking in the 2.61 
acres of additional space to be provided to United Airlines 
under the proposed lease modification. 

According to the Ms. Schimke, the Airport currently 
charges $48 per parking space permit, per month, or $576 
annually, for comparable space used by airlines for 
employee parking (parking with no bus service), which the 
Airport provides to airlines on a per space permit basis. Ms. 
Schimke advises that this rate is based on the Airport's 
Rates and Charges for Airlines, which is adjusted and 
published annually by the Airport. Since the Airport can in 
some cases rent on average two permits per parking space 
(since the Airport is open 24 hours per day), the average 
monthly value of a parking space for airline employees is 
$96 per month, according to Mr. Franzella. At this rate of 
$96 per month, the total value of the 150 subject parking 
spaces would be $14,400 per month, or $172,800 annually. 
Under the proposed lease modification, based on the 
$93,645 rental revenue per year payable by United Airlines 
to the Airport for the 2.61 acres which provide United 
Airlines with 150 parking spaces, United Airlines would 
pay to the Airport an average of approximately $52.03 per 
month per parking space, or approximately $7,804 per 
month ($93,645 annually) for the entire 2.61 acres. This 
$52.03 is approximately $43.97 less per parking space per 
month ($96 less $52.03) than the average monthly rate of 
$96 per month per parking space that the Airport is 
currently charging for airline employee parking. Ms. 
Schimke advises that in addition to the 150 parking spaces, 
the subject 2.61 acres includes circulation space for 
vehicles. Under the subject lease and proposed 
modification, United Airlines would not be able to 
reconfigure the parking layout to create additional parking 
spaces, according to Mr. Franzella. 

Furthermore, based on a comparison of parking available in 
the general vicinity of the Airport, CalTrans currently 
charges on average $61 (approximately $59 to $63 per 
month) for leased paved parking spaces approximately the 
same size as the subject 150 parking spaces to be provided 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

9 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



to United Airlines at the Airport 1 ), according to information 
provided to the Budget Analyst by the Division of Real 
Estate. 

In addition, if the Airport were to have to dedicated the 
2.61 acre area for public parking use instead of for United 
Airlines employee parking, which in fact the Airport 
intends to eventually do in its Parking Lot DD, which is 
adjacent to the 2.61 acres being provided to United 
Airlines, then the Airport could have charged its current 
rate of $15 per day per space 2 for long-term public parking, 
or approximately $450 gross per month ($5,400 annually), 
according to Ms. Schimke. The Airport collects an average 
net revenue of $318 per parking space per month ($3,816 
annually) from long-term public parking, accounting for 
fluctuations in demand, according to Mr. Franzella. Mr. 
Franzella advises that the Airport would not have elected 
to use the subject 2.61 acres for long-term public parking 
due to the property's location and the investment that 
would have been required to construct the infrastructure 
necessary for long-term parking. 

A comparison of such parking charges are as follows: 



Parking Use 


Monthly 

Rate 
Charged 
per Space 


Total 

Annual 

Rent for 

150 Spaces 


Proposed Lease Modification, 

2.61 acres including 150 parking spaces for 
the proposed rent being charged to United 


$52.03 


$93,645 


CalTrans Leased Parking Space in 

Vicinity of Airport (average rent) for 150 
parking spaces 


$61 


$109,800 


Comparable Charges by the Airport for 
Airline Employee Parking for 150 parking 
spaces (provided per space, based on two 
permits each) 


$96 


$172,800 


Long-Term Airport Public Parking 

(Net Revenue for Airport for 150 parking 
spaces) 


$318 


$572,400 



1 The Real Estate Division reports that CalTrans pays a maxim vim of SO. 20 per square foot of 
comparable paved parking, which when multiplied by the average Airport-reported 315 square-feet 
of each of the subject 150 parking spaces, would result in a monthly parking rate of $63. 

2 Ms. Schimke advises that the Airport charges for long-term parking SI for every 15 
minutes, with a maximum daily fee of $15. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
10 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

As shown in the above table: 



• Based on 150 parking spaces, the proposed $93,645 
annual rent to be charged to United Airlines under the 
proposed subject lease modification would be $16,155 
less than the approximate annual rent of $109,800 
charged by CalTrans for similar parking spaces in the 
vicinity of the Airport. 

• Moreover, according to the Airport, the annual $93,645 
rent to be charged to United Airlines under the proposed 
subject lease modification charged for the subject 150 
parking spaces under the proposed lease modification, 
including additional vehicle circulation space, would be 
$79,155 less than the $172,800 annual amount charged 
by the Airport per space (based on an average of 2 
permits per space) by the Airport to airlines for permits 
for airline employee parking. 

• Further, the proposed annual rent of $93,645 to be 
charged by United Airlines under the proposed subject 
lease modification would be $478,755 less than the 
estimated $572,400 in net revenue that the Airport 
earns from 150 long-term parking places, not accounting 
for any initial investment costs which would be required 
by the Airport for long-term parking. 

11. Based on the data obtained in response to the Finance 
Committee's question concerning the value of parking 
spaces included in the proposed lease with United Airlines: 

a) the proposed lease modification which would result in a 
rent charged to United Airlines of $52.03 monthly for 
each of the 150 parking spaces would be 14.7 percent 
less than comparable parking in the vicinity of the 
Airport of approximately $61 monthly for the parking 
leased by CalTrans and 45.8 percent less than the 
monthly $96 the Airport currently charges Airlines per 
employee parking space, based on an average of two 
permits per space; and, 

b) the proposed lease modification which would result in a 
rent charged to United Airlines of $52.03 monthly for 
each of the 150 parking spaces would be 83.6 percent 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

11 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

less than the average $318 monthly net revenue per 
space which the Airport currently receives for long- 
term Airport public parking. 

12. The Budget Analyst based the above calculations on the 
assumption that, under the proposed lease modification, 
the United Airlines would be provided 150 new parking 
spaces, based upon information received from the Airport. 
However, the Airport now advises that United Airlines will 
receive a net total of 75 new parking spaces (the 150 
parking spaces provided in the subject 2.61 acres less 75 
parking spaces under the 0.74 acres which United Airlines 
has agreed to relinquish to the Airport under the proposed 
lease modification.) However, this analysis by the Budget 
Analyst addresses the fair market value of the new space 
that will now be leased to United Airlines that includes 150 
parking spaces. 



Recommendations: 1. Amend the proposed resolution to provide for retroactive 
authorization, in accordance with Comment No. 2 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors since under the 
proposed lease Modification No. 3, the Airport will not 
receive current fair market value until July 1, 2003 and, as 
the lease presently states, the Airport does not require 
United Airlines to pay annual rent adjustments based on 
annual percentage increases in the Consumer Price Index 
(CPI) over the entire potential 40-year term of this lease. In 
addition, the fair market value rates of the parking spaces 
to be provided to United Airlines under the proposed lease 
are considerably less than comparable parking rates that 
could be received for parking as noted in Comments 10 and 
11, above. 

3. As requested by the Airport, continue this proposed 
resolution for two weeks, in accordance with Comment No. 
9 above. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Attachment I 
J^a^e 1 or 2 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 

INTEROFFICE MEMORANDUM 



TO: Harvey Rose DATE: January 24, 2001 

Budget Analyst 

A 

FROM: Bob Rhoades Gc~' 

Deputy Airport Director, Business 

SUBJECT: Lot DD Development - MultiModal Transportation Center 

Lot DD consists of a 3,21 S space parking garage for Airport and tenant employees under Airport 
control. It also contains a secure 1,190 space, paved parking lot under long-term lease throueh 
year 2013 to United Airlines ("UA") for UA employee parking. Access to the employee parking 
garage is by way of a signalized entry/exit from South Airport Boulevard. Access to the UA 
employee parking area is from a separate signalized entry/exit from South Airport Boulevard 
with an additional (stop si^n controlled) exit onto westbound San Bruno Avenue. Shunle buses 
transport employees to and from other Airport destinations. 

The Airport intends to improve Lot DD as pan of a Multi-Modal Transportation Center 
("MMTC") development. Under the "Transit First Policy adopted by the Airport Commission 
in 1996, the Airport is committed to the development of a ground transportation system which 
gives priority to alternate transit modes. As part of this commitment, the development of the 
MMTC at Lot DD would provide a consolidated transportation connection for long-term airpon 
parking, buses, and bicyclists, with access to the terminal complex. Toe MMTC would achieve a 
number of transit first objectives, such as: 1) reduce vehicular travel to and congestion on the 
passenger terminal roadways by providing direct access via AirTrain for remote long-term 
parking sites; 2) encourage use of public transit by providing a direct connection between a new 
SamTrans stop and AirTrain; 3) encourage bicycle commuting by providing an extension of the 
Bay Trail, and new bicycle parking facilities with direct access to the terminal complex via 
AirTrain. 

Lot DD improvements will involve an extension of the AirTrain System (the Airpon lisht rail 
system); two MMTC AirTrain Stations; construction of a link of the San Francisco Bay Trail- 
and expansion of long-term parking facilities. The Lot DD improvements are broken into rwo 
phases for implementation. 

Phase I improvements include: paving an unimproved portion of the lot to add aporoximately 
1,600 additional parking spaces to initially be used by employees; signalization improvements at 
the intersections of South Airport Boulevard and the I-3S0 off and on-ramps; construction of the 
Bay Trail link through Lot DD; and relocation of the parking lot exit onto San Bruno Avenue. A 
contract is currently underway to make the first phase improvements. 



. 13 



. (•*■".*' Attachment I 

•• 'i ••..-.- . fage 2 or 2 

/•• 

Harvey Rose 
January 24. 2001 
Pas=2 



Phase TI improvements include: the extension of the AirTrain System; construction of a second 
parking structure; and the conversion of the employee parking lot and structures into lonp-term 
parking facilities. 

The only viable vehicular access to the new parking area being developed is through the United 
Airlines' secure leasehold area. Without such access, the new surface parking area being 
developed in Phase I would be unusable, making less long-term parking available in the future. 
To obtain UA agreement to bisect their leasehold the Airport agreed to increase the UA 
leasehold to accommodate 150 additional parking spaces and to retain the access onto San Bruno 
Avenue for the UA employees. 

Phase I of the project is now underway. The entire MMTC, including phase II improvements, is 
expected to be complete within four to six years. 



14 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

Item 2 - File 01-0052 

Note: This item was continued by the Finance Committee at its meeting of 
February 7, 2001. 



Department: 
Item: 



Lessor: 

Lessee: 

Total Acreage and 
Cost Per Month 
Payable by United 
Airlines, Inc. to the 
Airport: 



Purpose of Lease: 

Amount Payable by 
United to Airport: 



Airport Commission 

Resolution approving a new lease agreement for Plot 6 
between United Airlines, Inc. (United) and the City and 
County of San Francisco, acting by and through its 
Airport Commission 

City and County of San Francisco 

United Airlines, Inc. 



16.04 acres at a monthly rental rate of $132,054.65 for the 
first and second years of the proposed lease 
(approximately $8,232.83 per acre per month). For the 
first and second years, annual rent would total 
$1,584,655.76 ($98,794 per acre per year). 

United will use the 16.04 acres for an air cargo facility, 
administrative offices and employee parking. 



$1,584,655.76 per year for the first and second year of the 
lease. According to Ms. Dorothy Schimke of the Airport, 
rent in the amount of $1,584,655.76 per year represents 
the fair market value of the subject 16.04 acres on June 1, 
1999, the retroactive effective date of the proposed lease. 
Presently, United pays the Airport $508,353 under permit 
for 19.35 acres (see Comment No. 2). The proposed lease 
provides for annual increases in the rent based on 
increases in the Consumer Price Index (CPI). According to 
the proposed lease, the CPI adjustment would begin on 
June 1, 2001. As stated in the Attachment provided by 
the Airport, there will be no CPI adjustment between 
June 1, 1999 and June 1, 2001, thereby resulting in no 
CPI adjustment for the second year of the lease between 
June 1, 2000 and June 1, 2001. The lease requires United 
Airlines to pay CPI adjustments for the third, fourth and 
fifth year of the lease. In the sixth year of the proposed 
lease, the annual rental payment to the Airport will be 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Term of Lease: 



Right of Renewal: 

Maintenance and 
Operations: 



Description: 



determined by a City reappraisal of the land to 
reestablish the fair market value amount. Subsequent 
annual increases in the rent will be made based on 
increases in the CPI through the end of the lease. 

Retroactive to June 1, 1999 to June 30, 2011 (12 years 
and one month) 

Lessee has no renewal rights. 



The Lessee, United Airlines, Inc., pays for the costs of all 
maintenance and operations. 

The proposed resolution would authorize a new 12 year 
and one month lease retroactive to June 1, 1999 of 16.04 
acres of a newly configured Plot 6 to accommodate 
United's air cargo facility, some administrative offices and 
employee parking. The 16.04 acres of a newly configured 
Plot 6 would constitute approximately 83 percent of the 
19.35 acres of Plots 5 and 6 covered under a month-to- 
month permit, cancelable on 30-day notice, since the 
expiration of original leases in 1993. According to Ms. 
Schimke, United occupied the 16.04 acres from 1993 until 
June 1, 1999 on a permit basis, instead of under a lease, 
pursuant to the following conditions contained in a 
Memorandum of Understanding negotiated in the early 
1990s between the Airport and United Airlines: 

1) Upon termination of the leases of Plots 5 and 6 
in 1993, the leases would be replaced in the interim 
by month-to-month permits, for the same areas at 
the same land rental rates as were then in effect, 
until the land was required for the Airport's Master 
Plan construction or the functions were 
accommodated elsewhere; 

2) The Airport would offer United a "standard 
lease" for that portion of the site primarily 
comprising Plot 6, for continued accommodation of 
its air cargo facility, offices and related parking; 

3) Rent under the interim permit(s) would remain 
at the same rate as was in effect upon termination 
of the Plots 5 and 6 leases, and would be adjusted 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

16 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

to fair market value at the time the new leases 
were in place. 

The differences between the proposed lease for 16.04 acres 
of a newly configured Plot 6 and the existing month-to- 
month permit for 19.35 acres of Plots 5 and 6 are (1) the 
permit is cancelable upon 30-days notice, (2) the new 
lease adjusts the rents as described in Comment No. 2 
below, (3) 1.43 acres have been added to result in a total 
acreage of 16.04 acres for Plot 6, which originally totaled 
14.61 acres, and (4) Plot 6 has been slightly reconfigured 
due to the Airport's Master Plan construction program for 
Boarding Area "G" and the Air Train (Airport Light Rail 
System). 

The proposed lease would reflect the City's 
Administrative Code and other City requirements, such 
as provisions requiring compliance with the ban on 
tropical hardwoods and virgin redwood, the MacBride 
Principles related to employment inequity in Northern 
Ireland, the Non-Discrimination in City Contracts and 
Equal Benefits Ordinance, and the Minimum 
Compensation Ordinance. 

Comments: 1. The Airport Commission adopted Resolution No. 00- 

0464 on December 19, 2000, recommending the proposed 
new lease to United retroactive to June 1, 1999. As shown 
in the Attachment, the lease is retroactive to June 1, 1999 
because in June of 1999, the Airport determined that the 
Air Train required adjustments that would encroach upon 
the eastern boundary of the new Plot 6. Finalization of 
the Plot 6 lease was therefore put off until the Air Train 
issues were settled and a legal description of the premises 
could be accurately determined. Ms. Schimke reports that 
because these adjustments were minimal, United agreed 
to establishing an effective date of June 1, 1999 for the 
proposed lease at the then market value rental rate. The 
final configuration of the parcel incorporating the Air 
Train land recapture was not defined and resolved 
between the Airport and United until November of 2000. 

2. According to Ms. Schimke, the proposed lease of 16.04 
acres includes 14.61 acres of the old Plot 6 and 1.43 acres 
of the old Plot 5. As previously noted, the annual rent for 
the first and second year for the 16.04 acres would be 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

17 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



$1,584,655.76, a net annual increase of $1,076,302.76, or 
an increase of approximately 211.7 percent, retroactive to 
June 1, 1999, from the permit rent of $508,353 payable by 
United to the Airport for the 19.35 acres of Plots 5 and 6 
covered under permit. The new proposed lease pertaining 
to 16.04 acres would result in a reduction of 3.31 acres 
being leased by the Airport to United. Ms. Schimke 
reports that upon approval of the proposed lease by the 
Board of Supervisors, United would pay retroactively to 
the City $1,793,838, representing the difference in the 
monthly rental income of $89,691.90 for the 20 month 
period from June 1, 1999, the start of the proposed lease, 
through January 31, 2001. The net increase in rent 
payable by United to the Airport for the first two years of 
the lease is calculated as follows: 





Approximate Annual 
Cost per Acre 


Total Acres 


Annual Airport 
Revenues 


Old permit: Plot 5 


$42,000 


4.071 


$170,940 


Plot 6 


$22,082 


15.28 


$337,413 


Subtotal for permit 




19.35 


5508,353 


Proposed new lease for 

new Plot 6 (includes a 
majority of the acreage 
of the old Plot 6 and a 
small parcel of the old 
Plot 5) 


$98,794 


16.04 


$1,584,655.76 


Net Increase 






51,076,302.76 



3. The Budget Analyst notes that had the rent amount 
for the second year of the proposed lease between June 1, 
2000 and June 1, 2001 been adjusted for the increase in 
the CPI, then the rent would have increased by 3.77 
percent or approximately $59,742 to an annual rent of 
approximately $1,644,398 instead of the proposed annual 
rent of $1,584,655.76 for the second year of the proposed 
lease. 

4. Since the lease began on June 1, 1999, the proposed 
resolution should be amended to provide for retroactive 
authorization. 



1 Under the proposed lease for the new Plot 6, United will lease 1.43 acres of the 4.07 acres of 
Plot 5 that were under permit. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

18 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

5. At the meeting of February 7, 2001 the Finance 
Committee requested the Airport Director to attempt to 
renegotiate this proposed new lease in order to require 
United Airlines to pay a CPI adjustment to the Airport for 
the second year of this proposed lease between June 1, 
2000 and June 1, 2001. As of the writing of this report, 
according to Mr. Peter Nardoza of the Airport, the Airport 
has not yet been in contact with representatives of United 
Airlines concerning a possible renegotiation of this lease 
as requested by the Finance Committee. Therefore, Mr. 
Nardoza is requesting that this item be continued for two 
weeks. 

Recommendations: 1. Amend the proposed resolution to provide for 

retroactive authorization, in accordance with Comment 
No. 4 above. 

2. Approval of the proposed resolution, as amended, is a 
policy matter for the Board of Supervisors because there 
will be no CPI adjustment for rent for the second year of 
the proposed lease between June 1, 2000 and June 1, 
2001. Had the rent amount being charged by the Airport 
to United Airlines for the second year of the proposed 
lease been adjusted upward according to the increase in 
the CPI, the rent payable by United to the Airport would 
have increased by approximately $59,742 to an annual 
rent of $1,644,398, instead of the proposed annual rent of 
$1,584,655.76 as noted in Comment No. 3. 

3. As requested by the Airport, continue this proposed 
resolution for two weeks. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

19 



AIRPORT COMMISSION 

SAN FRANCISCO INTERNATIONAL AIRPORT 

CITY AND COUNTY OF SAN FRANCISCO 

MEMORANDUM 



TO: 

FROM: 

SUBJECT: Plot 6 Lease - United Airlines 



Harvey Rose 
Budget Analyst 

BobRhoades |RL 

Deputy Airport Director, Business 



DATE: January 25, 2001 



As discussed in the Budget Analyst's report, the subject lease comprises one element of a 
complex series of land exchanges required to implement the Airport's Master Plan. The general 
concept, negotiated in the early 1 990's, provided for existing permits to remain in place, at then- 
current rents, until the land was required for the Master Plan construction or the functions were 
accommodated elsewhere. It was generally agreed that the Plot 6 lease would not be finalized 
until the parcel reached its final configuration. It was anticipated thai the plot would reach its 
final configuration when the Airport recaptured a parking parcel in the area now comprising a 
portion of the new Boarding Area G apron. 

The parking parcel was surrendered by United in June 1999; however, at that time it became 
apparent that the Air Train (Airport light rail system) guideway required adjustments that would 
encroach upon the eastern boundary of Plot 6. The Plot 6 lease could not be absolutely finalized 
until the guideway issues were settled and legal description of the premises could be written, 
based upon formal survey. The issues were finally resolved in late 2000. 

Because the guideway adjustments were minimal, the parties agreed that, once approved by the 
Board of Supervisors, the Plot 6 rent commencement would be retroactive to June 1, 1999. The 
first CPI adjustment will occur in accordance with lease provisions, once the lease is actually in 
place (after Board approval). The Base Index for CPI adjustments is defined as "the most recent 
Consumer Price Index published immediately prior to the Commencement Date," or April 1999. 
The Comparison Index for the first (June 2001) adjustment will be April 2001 , generating a two- 
year value increase. 



20 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Item 3 -File 01-0161 

Department: 

Item: 



Lessor: 



Lessee: 



No. of Sq. Ft. and 
Rent Per Year 
Payable by The Body 
Shop to the Airport: 



Purpose of Lease: 



Airport Commission 

Resolution approving a new Boarding Area "F' Cosmetic 
and Toiletries Lease between Buth-Na-Bodhaige, Inc., 
doing business as The Body Shop, and the City and 
County of San Francisco, acting by and through its 
Airport Commission. 

City and County of San Francisco 

Buth-Na-Bodhaige, Inc., doing business as (dba) The Body 
Shop 



1,123 sq. ft., located at Boarding Area "F' in the North 
Terminal by Gate 82 at the Airport. The annual rent 
payable by Buth-Na-Bodhaige, Inc., dba The Body Shop 
(the proposed lessee) to the Airport would be the greater 
of the Minimum Annual Guarantee of $275,001 for the 
first year of the proposed lease or a percentage of gross 
revenues realized by the proposed lessee. According to the 
proposed lease, the annual percentage of gross revenues 
payable by the proposed lessee to the Airport would be 12 
percent of gross revenues up to and including $500,000, 
plus 14 percent of gross revenues from $500,000.01 up to 
and including $1,000,000, plus 16 percent of gross 
revenues over $1,000,000. The proposed lease provides for 
annual increases in the Minimum Annual Guarantee 
based on increases in the Consumer Price Index. 

The proposed lessee will use the 1,123 sq. ft. of space to 
display and sell, on a non-exclusive basis, retail 
merchandise generally found in a cosmetic and toiletries 
store. 



Term of Lease: January 7, 2001 through January 6, 2006 (five years) 

Right of Renewal: Lessee has no renewal rights. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

21 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

Utilities and 
Janitorial Services: 



The lessee pays for the costs of all utilities and janitorial 
services. 



Tenant 
Improvements: 



Description of 
Proposed Lease: 



Comments: 



According to Ms. Cathy Widener of the Airport, the 
proposed lessee would be required to pay for tenant 
improvements to the 1,123 sq. ft. of leased space, at a 
minimum cost to the lessee of $250 per sq. ft., or 
$280,750. 

The proposed resolution would authorize a new five year 
lease of 1,123 sq. ft. at Boarding Area "F' next to Gate 82 
to accommodate The Body Shop is a retail concession 
which sells cosmetic and toiletries. According to Ms. 
Widener, the proposed lessee occupied 1,423 sq. ft. at the 
Airport from December 1, 1995 through January 6, 2001 
under a prior lease. The 1,123 sq. ft. of space under the 
proposed lease constitutes approximately 79 percent of 
the 1,423 sq. ft. of space covered under the prior lease. 
Ms. Widener reports that the reduction of 300 sq. ft. of 
space is a result of reconfiguring a portion of the original 
space to accommodate another concession under a 
separate lease which will not be subject to future approval 
by the Board of Supervisors, as noted in City Charter 
Section 9.118, because the Airport space will be leased at 
a rental amount totaling under $1,000,000 for the five 
year term of the lease. 

1. According to Ms. Widener, the proposed lease of 1,123 
sq. ft. would result in a reduction of 300 sq. ft. of space 
previously leased to the proposed lessee at the Airport. 
The Minimum Annual Guarantee of the prior lease was 
$152,412.94. The net increase in Minimum Annual 
Guarantee payable by the proposed lessee to the Airport 
is calculated as follows: 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

22 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 





Approximate Monthly 
Cost per Sq. Ft. 


Total Sq. Ft. 


Approximate Annual 
Airport Revenues 


Old lease 


$8.93 


1,423 


$152,412.94 Minimum Annual 
Guarantee or 15 percent of gross 
revenues, whichever was greater 


Proposed new 
lease 


$20.41 


1,123 


$275,001 Minimum Annual 

Guarantee or 12 percent of gross 

revenues up to and including 

$500,000; plus 14 percent of 

gross revenues from $500,000.01 

up to and including $1,000,000; 

plus 16 percent of gross 

revenues over $1,000,000, 

whichever is greater 


Net Increase in Minimum Annual Guarantee 
Payable to the Airport 


$122,588.06/ 



2. Since the lease began on January 7, 2001, the 
proposed resolution should be amended to provide for 
retroactive authorization. 

3. According to Ms. Widener, on October 5, 2000 the 
Airport issued Invitations to Bid to 31 firms for the 
subject space. The Airport received the following two bids 
for this lease: (1) Buth-Na-Bodhaige, Inc., the existing 
lessee, dba The Body Shop with a Minimum Annual 
Guarantee of $275,001, and (2) Meritage Skin Care with a 
Minimum Annual Guarantee of $249,660. On December 
19, 2000, the Airport Commission approved the proposed 
lease of space to the proposed lessee. The bid item, as 
required of the Airport, was the Minimum Annual 
Guarantee. The percentages of gross revenues as 
identified on the first page of this report were required by 
the Airport from all bidders. 

4. The gross revenues achieved by the proposed lessee 
would need to exceed $1,906,256 1 for the Airport's 
percentage revenues from the proposed lease to exceed the 
Minimum Annual Guarantee of $275,001. 



1 $1,906,256 was calculated in the following manner: first $500,000 gross revenues realized by the 
proposed lessee at 12 percent ($60,000), plus second $500,000 gross revenues realized by the 
proposed lessee at 14 percent ($70,000), plus gross revenues over $1,000,000, totaling $906,256, 
realized by the proposed lessee at 16 percent ($145,001). $60,000 plus $70,000 plus $145,001 equals 
the Minimum Annual Guarantee of $275,001. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

23 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

5. Ms. Widener reports that actual rental revenues paid 
to the Airport under the prior lease totaled $1,147,810 in 
Calendar Year (CY) 1996, $1,174,742 in CY 1997, 
$1,245,882 in CY 1998, and $1,216,148 in CY 1999.2 
Based on the actual rent of $1,216,148 paid by the lessee 
in CY 1999, the lessee earned gross revenues of 
$8,107,653 3 in 1999. Although the Airport has not 
estimated the proposed lessee's gross revenues for the 
year 2001, if the $8,107,653 in gross revenues realized by 
the lessee in CY 1999 were sustained in the future 
(recognizing that the new lease is 300 sq. ft. less than the 
prior lease), the Airport would receive rental revenues of 
$1,267,224 4 annually under the new lease, an increase of 
$51,076 or 4.2 percent over the prior lease which 
contained 300 more sq. ft. However, the percentage 
increase in rent of the proposed lease over the prior lease 
will grow if the proposed lessee's gross revenues increase 
in the future because the marginal rent paid by the 
proposed lessee to the Airport will be based on 16 percent 
of lessee's gross revenue over $1,000,000 instead of 15 
percent under the prior lease. 

6. As previously noted, irrespective of the gross revenues 
realized by the lessee, the Airport will be paid an increase 
in the Minimum Annual Guarantee for the proposed new 
lease of $122,588.06 for a lease which contains 300 less 
sq. ft. over the Minimum Annual Guarantee paid under 
the prior lease. 

Recommendations: 1. Amend the proposed resolution to provide for 

retroactive authorization, in accordance with Comment 
No. 2 above. 

2. Approve the proposed resolution, as amended. 



2 To date, figures for actual lease revenue from CY 2000 are not available. 

3 $8,107,653 was calculated by dividing $1,216,148 in lease revenue in CY 1999 by 15 
percent, which was the percentage of rent required under the prior lease. 

4 $1,267,224, the potential future lease revenue, was calculated taking the sum of the 
following: 12 percent of the first $500,000 gross revenues realized by the proposed lessee 
($60,000), plus 14 percent of second $500,000 gross revenues realized by the proposed lessee 
($70,000), plus 16 percent of $7,107,653 gross revenues realized by the lessee ($1,137,224). 
$60,000 plus $70,000 plus $1,137,224 equals $1,267,224. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

24 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

REVISED 2/16/01 
Item 3 -File 01-0161 



5. Ms. Widener reports that gross rental revenues 
realized by The Body Shop under its prior lease totaled 
$1,245,882 in 1998 and $1,216,148 in 1999 2 . Ms. Widener 
further reports that, based on 15 percent of gross 
revenues under the prior lease, the lease revenues paid by 
the lessee to the Airport for the 12 months ending 
November 30, 1998 totaled $186,882, and for the 12 
months ending November 30, 1999 totaled $182,623. The 
15 percent of gross revenue under the prior lease exceeded 
the Minimum Annual Guarantee of $152,412.94 by 
$34,469 in 1998 and $30,210 in 1999. Ms. Widener 
reports that the Airport has not estimated gross revenues 
under the proposed new lease for 2001 and therefore has 
not calculated revenues payable to the Airport based on 
the percentage of gross revenues under the new lease. As 
previously noted such percentages range from 12 percent 
to 16 percent. 

6. Irrespective of the gross revenues realized by the 
lessee under the proposed new lease, the Airport will be 
paid an increase in the Minimum Annual Guarantee for 
the proposed new lease of $122,588.06 for a lease which 
contains 300 less sq. ft. over the Minimum Annual 
Guarantee paid under the prior lease. Further, the 
Minimum Annual Guarantee of $275,001 under the 
proposed new lease exceeds the rent paid to the Airport 
for the 12 month ending November 30, 1999 by $92,378 
($275,001 less $182,623). 

Recommendations: 1. Amend the proposed resolution to provide for 

retroactive authorization, in accordance with Comment 
No. 2 above. 

2. Approve the proposed resolution, as amended. 



2 To date, figures for gross revenue from 2000 are not available. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

24 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Item 4 -File 01-0061 

Department: 

Item: 



Description: 



Department of Public Health (DPH) 

Ordinance adding Section 10.117-126 to the San 
Francisco Administrative Code, establishing a fund for 
deposit of sums received under the Substance Abuse and 
Crime Prevention Act of 2000 and designating the 
Department of Public Health as the lead agency for 
administration of the fund. 

On November 7, 2000, California voters approved 
Proposition 36, the Substance Abuse and Crime 
Prevention Act of 2000. The Act requires that certain 
non-violent drug possession offenders receive drug 
treatment services in the community rather than 
incarceration. The California Department of Alcohol and 
Drug Programs has allocated funds for counties to receive 
upon compliance with qualifying terms of the Act. To 
qualify for funds, the Substance Abuse and Crime 
Prevention Act of 2000 requires counties to (1) establish a 
trust fund to deposit and account for the sums received 
under the Act, and (2) designate a lead agency to 
administer implementation of the Act. 

The proposed ordinance would establish a trust account 
for the purpose of receiving and accounting for State 
funds from the Substance Abuse and Crime Prevention 
Act of 2000, in accordance with Proposition 36, and would 
designate DPH as the lead agency for implementation of 
the Act. 



Comments: 



1. According to Ms. Monique Zmuda of DPH, the State 
intends to allocate $58.8 million in start-up funds in FY 
2000-2001 to various counties throughout California, and 
$117.6 million annually to those same counties from FY 
2001-2002 through FY 2005-2006 for continued 
implementation of the Act. According to Ms. Zmuda, San 
Francisco would receive $2,300,665 in FY 2000-2001 
start-up funding and, beginning FY 2001-2002, an 
estimated $4.6 million in funds annually through FY 
2005-2006. Expenditure of such funds would be subject to 
appropriation approval by the Board of Supervisors. The 
Attachment to this report contains a list of the State's 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

25 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



proposed start-up allocations to each of the counties in 
California that would receive funding for FY 2000-2001. 
All such funds are to be used to provide non-violent 
offenders who are in possession of drugs with drug 
treatment services in the community instead of 
incarceration. 

2. According to Ms. Zmuda, the initial $2.3 million start- 
up allocation from the State to the City and County of San 
Francisco would need to be allocated to City departments 
by the Board of Supervisors through supplemental 
appropriations. Ms. Zmuda states, however, that 
following the start-up period of the remainder of FY 2000- 
2001, all of the subject State funds would become a part of 
the regular departmental annual budgets, subject to 
appropriations approval by the Board of Supervisors. 
Additionally, funds not spent in any given year would be 
carried forward to subsequent Fiscal Years, states Ms. 
Zmuda. According to Ms. Zmuda, while it is clear at this 
time that a large portion of these funds would need to be 
allocated to the DPH budget, it has not yet been 
determined how funds would be apportioned among 
departments. However, as previously noted the Board of 
Supervisors would have final appropriations approval of 
such funds. 

Ms. Zmuda notes that the California Department of 
Alcohol and Drug Programs has recommended that 
counties receiving Substance Abuse and Crime Prevention 
Act of 2000 funds designate their respective departments 
of public health as the lead agency. Ms. Zmuda states 
that, because of this recommendation, and because public 
health departments will ultimately be the agencies 
providing substance abuse counseling as required by the 
Act, the California Department of Drug and Alcohol 
expects that most if not all counties receiving funds will 
designate their respective departments of public health as 
lead agencies, as is the case in San Francisco. 

3. Ms. Zmuda states that all costs of implementation of 
Substance Abuse and Crime Prevention Act of 2000, 
including administrative and programmatic costs, would 
be fully paid for by the funds allocated by the State to the 
City and County of San Francisco. According to Ms. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

26 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Zmuda, the portion of the funds that would be spent to 
cover administrative costs rather than programmatic 
costs has not yet been determined. However, all such 
administrative and programmatic costs would be subject 
to appropriation approval by the Board of Supervisors. 



Recommendation: Approve the proposed resolution. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

27 



FY 2000-01 Substance Abuse Treatment Trust Funds 
Allocation of $58,781,147 



Attachment 











Numbor" of 


Amount 


Number" - * 


Amount 








. 


January 1 


Standard 


F*lony 


of Fund* 


et 


of Funds 


Total 






County 


2000 


Methodology 


Drug Arrest, 


Baaed 


Treatment 


Based 


Allocation 






Population' 


Allocation™ 


Iflsdtmtanor 


on Arrests 


Caseload 


on Caseload 














Drug Amite 














ALAMEDA 


1,454,300 


$1.140412 


13,424 


S8S2488 


4.167 


$759418 


:.-:.■ 1 






ALPINE 


1,190 


S74.350 


43 


$2,729 


2 


$365 


177.4*4 






HOOCH 


34,400 


$88,726 


164 


$10,410 


40 


$7,294 


$116,429 






BUTTE 


204,000 


S223410 


995 


S63.1S8 


471 


$85,883 


$372^30 






CALAVERAS 


38.500 


S101.73S 


259 


$16,440 


152 


$27,716 


$145491 






COLUSA 


1B.7S0 


$87,239 


216 


$13,711 


135 


$24,616 


$125565 






CONTRA COSTA 


930,000 ♦. 


$750,083 


5.879 


$373,170 


2.308 


$420,845 


S1.550.0S7 






DEL NORTE 


26,000 


$94,028 


148 


$9,394 


138 


$25,163 


5128586 






ELDORADO 


152,900 


$165,703 


727 


$46,146 


320 


$58,349 


$290,199 






FRESNO 


605,000 


$664,335 


£.889 


$373404 


2,572 


$458,043 


S1.4M.1B2 






GLENN 


27,100 


S S3 .366 


159 


S10.0S3 


79 


$14,405 


$117465 






HUMBOLDT 


127,600 


$167,133 


762 


$48,368 


170 


$30,998 


$248,490 






KiPERlAL 


145,300 


$160,125 


1.917 


$121462 


312 


$56,891 


$358467 






INYO 


18,200 


$86,635 


110 


$8,982 


.65 


S1S.40C 


S10941C 






KERN 


658.900 


$557,100 


6,402 


$406,367 


1.267 


$231,027 


$1,194,483 






KINGS 


131.200 


$160,776 


652 


$41488 


161 


$29,357 


$24051* 






LAKE 


55,700 


$114,360 


4U 


$26,279 


199 


$36486 


$178424 






LASSEN 


33,950 


$98,396 


75 


$4,761 


147 


$26,804 


$129460 






LOS ANGELES 


9,804,300 


$7,328,414 


58.636 


$1,734,615 


25.666 


$4,679,983 


$15,743 J) 11 






MADERA 


117,100 


$159,426 


400 


$25,390 


233 


$42,486 


$227,302 






MAWN 


249,700 


$256,753 


680 


$43,163 


504 


$91,900 


$30151* 






UARIPOSA 


16.150 


$85,331 


87 


$5,522 


60 


$10,941 


$101,793 






MENDOCINO 


87.600 


$137,774 


761 


$48404 


258 


$47,044 


$233,122 






MERCED 


210,100 


$227,687 


1.420 


$90,134 


276 


$50,326 


$368,148 






MODOC 


9.000 


$80,670 


57 


$3,618 


41 


$7,476 


$91,764 






MONO 


10.900 


$81,477 


37 


$2449 


187 


$34,098 


JI17.S34 






MONTEREY 


399,300 


$366457 


2.126 


$134,948 


567 


$103,388 


$804,19] 






NAPA 


127.000 


$166,693 


492 


$31,230 


312 


$58,891 


J254J13 






NEVADA 


91.100 


$140,343 


274 


$17492 


190 


$34,645 


$192480 






ORANGE 


2.828.400 


$2,149,482 


16.515 


$1.048490 


4,353 


$793,734 


$3491405 






PLACCR 


234.4O0 


$245,523 


1.1 SS 


$73,314 


654 


$119452 


$438,088 






PLUMAS 


20.350 


$88,413 


71 


$4407 


215 


$39404 


$132,123 






RIVERSIDE 


1,522.900 


$1,191,264 


9,029 


$573,116 


1.9SO 


$355567 


$3.119448 






SACRAMENTO 


1,209,500 


$961,232 


S.0O2 


$571,402 


3.169 


5577.64 1 


$2.1 10.475 






SAN BENITO 


49,800 


$110,029 


140 


$8486 


42 


$7,658 


$12*474 






SAN BERNARDINO 


1.689,300 


$1,313,399 


14.680 


$931,813 


2.943 


$536,632 


$2.7)1443 






SAN DIEGO 


2,911,500 


$2,210,476 


21,448 


$1,361,412 


5.325 


$970,97C 


$44*2457 






SAN FRANCISCO 


801,400 


$661,630 


10,679 


$677448 


5471 


$961,124 


$2400465 






SAN JOAQUIN 


566,600 


$489,353 


3.409 


$216,38€ 


1.465 


$267,131 


$972470 






SAN LUIS OBISPO 


245,200 


$253.45C 


1.140 


$72,361 


410 


$74.76£ 


$400471 






SAN MATEO 


730.000 


$60948€ 


3,216 


$204.13« 


1,565 


$285.36J 


$1498.786 






SANTA BARBARA 


414,200 


$377,494 


2,672 


$169,60; 


2.250 


$410.26! 


$957488 






SANTA CLARA 


1,736.700 


$1.348.t9C 


10.573 


S671.12 


2.610 


$475.91; 


$2.495223 






SANTA CRUZ 


255.000 


$260,54: 


2,138 


S135.7K 


) 595 


S108.49 


1 $504446 






SHASTA 


167,000 


$196,05: 


1.461 


$32,73 


' 271 


$46,41 


I tVULTni 






SIERRA 


3.140 


$75.78 


23 


$1,461 


) 46 


$8.36! 


$85529 






SISKIYOU 


44.200 


$105.91 


9 255 


$16,181 


5 397 


$72.39 


$194,494 






SOLANO 


399.000 


$366.33 


r 2.360 


$149,80 


1 594 


$108.31 


1 $824,449 






SONOMA 


450.100 


$403.84- 


1 2.772 


$172,14- 


» 1.533 


$279.53 


3 $8S5519 






STANISLAUS 


441.400 


$397,45! 


9 3.528 


$22344 


3 625 


$113.96 


1 $735481 






SUTTER/YUBA 


138.600 


$175.20 


T 1J02S 


$65.06 


2 435 


$79.31 


:-| $319588 






TEHAMA 


56,200 


$114.72 


T 292 


$1843 


5 193 


$35.19 


2 S164..4U 






TRINITY 


13,050 


$83.05 


5 113 


$7.17 


3 74 


$13.49 


: $103,721 






TULARE 


368,000 


$343,58 


3 3,745 


$23746 


8 683 


$12444 


$706,090 






TUOLUMNE 


53.000 


$11247 


B 152 


$9.64 


8 160 


$29.17 


$151300 






VENTURA 


756.500 


$628.73 


7 5.315 


$337,37 


1.245 


$227.01 


6 $1,193,122 






YOLO 


162.900 


$193.04 


3 1,256 


$79.72 


5 560 


$102.11 


2 $374579 






[STATEWIDE TOTA 


L 34.336.380 


I S29.390.57 


\ 231,513 


$14,695.28 


7 80.5S2 


$14,695.23 


S58.781.147 


I 



" B*«* «* rtrmnom PoeuUUon ExlmalM for January 1 , 3000. 

" Standard methodology S2400 p«r $ 1 million Increase. Ine remainder distributed per capita. 

"~ D«pL of Justice. Adult Drug Arrests. 1999. 

**** DepL of Alcohol and Drug Programs, California Alcohol and Drug Data System, based on the number of persons in treatment on November 1.1999, 



28 



Memo to Finance Committee 

February 21, 2000 Finance and Labor Committee Meeting 



Item 5 - File 01-0272 
Item: 

Amount: 
Source of funds: 
Description: 



Comment: 



Recommendation: 



Supplemental appropriation ordinance in the amount of 
$100,000 for disaster relief in El Salvador. 

$100,000 

General Fund Reserve 

On January 13, 2001 an earthquake measuring 7.6 on the 
Richter scale occurred in El Salvador reportedly killing 
over 800 persons and leaving thousands homeless. On 
February 13, 2001 a second earthquake measuring 6.6 on 
the Richter scale struck El Salvador. As of the writing of 
this report, news reports state that 274 persons have been 
found dead, over 2,000 have been injured and over 15,000 
homes have been destroyed. 

The proposed supplemental appropriation would commit 
$100,000 for disaster relief in El Salvador. 

According to the Office of the Sponsor of the proposed 
ordinance, an appropriate entity for receipt of the disaster 
relief contribution has not yet been identified. It is the 
expectation of the Office of the Sponsor that such a 
recipient will be identified by the Board of Supervisors 
meeting of Tuesday, February 20, prior to the Finance 
Committee meeting of February 21. 

According to Mr. Steve Kawa of the Mayor's Office, the 
disaster relief contribution would be disbursed through 
the Mayor's Office of Economic Development (MOED). Mr. 
Kawa adds that MOED would be responsible for assuring 
that the funds are contributed to an appropriate disaster 
relief organization and used for the intended purpose of 
providing relief for the El Salvador earthquake victims. 

In October of 1999, the Board of Supervisors approved an 
appropriation of $250,000 for earthquake relief efforts in 
the City of Taipai. Also, in 1995, $50,000 was 
appropriated by the Board of Supervisors for earthquake 
relief in the City of Osaka following the Kobe earthquake. 

Approval of the proposed ordinance is a policy matter for 
the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

29 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

Item 6 - File 01-0108 



Note: This item was severed from File No. 00-2087 and continued by the Finance 
and Labor Committee at its meeting of January 17, 2001, with a request by 
the Committee that the Assessor-Recorder attempt to reduce the contract 
with KPMG and instead complete the some of the contract work in-house. 



Department: 
Item: 



Amount: 
Source of Funds: 
Description: 



Assessor-Recorder's Office 

Ordinance appropriating $726,726 from the General Fund 
Reserve to fund a contract with KPMG to design and 
implement a reengineering plan for the Assessor-Recorder's 
Office for Fiscal Year 2000-01 

$726,726 

General Fund Reserve 

The proposed supplemental appropriation for $726,726 
was for the purpose of expanding an existing $400,000 
contract with KPMG to develop and implement a 
reengineering plan, and assist in reducing the 
Department's backlog in the processing of deeds for a total 
contract cost of $1,126,726, for the Assessor-Recorder's 
Office for Fiscal Year 2000-01. This reengineering plan 
analyzes the department's work processes in order to 
identify changes the department must make to run more 
effectively. Ms. Onyemem advises that the Assessor- 
Recorder's Office originally contracted with KPMG, in 
consultation with the Mayor's and Controller's Offices, in 
June of 2000 to improve efficiencies in the department. 
KPMG agreed to identify and re-engineer process 
inefficiencies, conduct a training needs assessment, 
provide necessary training, improve customer service and 
help the department transition into a new computer 
system. The Assessor-Recorder's Office included $400,000 
in its FY 2000-01 budget for this KPMG contract. Ms. 
Onyemem advises that the Assessor-Recorder's Office 
negotiated with the Controller's Office to include this 
$400,000 contract within a larger City contract with 
KPMG (discussed further in Comment No. 3 below). 

According to Ms. Onyemem, in September of 2000, and 
again in October of 2000, the Assessor-Recorder's Office 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

30 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



requested that KPMG revise and expand the scope of its 
work plan in the three ways listed below. The Budget 
Analyst notes that the Assessor-Recorder's Office did have 
authority to request from KPMG proposals for expanding 
the scope of the existing $400,000 contract. However, the 
Assessor-Recorder's Office did not have the authority to 
finalize the expanded contract discussed below without 
first obtaining approval from the Board of Supervisors of 
this subject additional appropriation of $726,726. 

As reported to the Finance and Labor Committee on 
January 17, 2001, this request of $726,726 was for the 
following three KPMG projects: 

(1) After KPMG and the Assessor-Recorder's Office agreed 
to the terms of the original $400,000 contract, in 
September of 2000 the Assessor-Recorder's Office 
directed KPMG to help manage and facilitate the 
reduction of the department's backlog in processing 
deeds, a priority for the Assessor-Recorder's Office. The 
proposed expanded work plan would expand the 
original contract by $207,926 to reduce the Assessor- 
Recorder's backlog in processing deeds. 

(2) KPMG also agreed to expand the scope of its contract 
with the Assessor-Recorder's Office at a cost of 
$172,664 for the expanded scope management plan. 
This expanded scope focuses on developing a new 
management strategy and reorganizing the 
department. 

(3) Finally, KPMG was to implement a reengineering plan 
for the Assessor-Recorder at a cost of $346,136. 

These three component costs of (a) $207,926, (b) $172,664 
and (c) $346,136 totaled $726,726, the subject of this 
request and together with KPMG's existing contract of 
$400,000 to assist the Assessor, the total contract with 
KPMG would have been $1,126,726. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

31 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



A summary budget for the total originally proposed 
contract costs of $1,126,726 with KPMG were as follows: 



SUMMAKY 




Reengineering Plan 
Original Budget 
Expanded Scope/Deed Backlog 


$400,000 
207,926* 


Revised Subtotal 


$607,926 


Expanded Scope/Management Plan 
Implementation of Reengineering Plan 


172,664* 
346,136* 


Total Contract Costs 


$1,126,726 



*Total of $726,726, which is the subject of this request. 

As shown in the table on the following page, the hourly 
rage being charged by KPMG ranges from $121.28 to 
$281.14. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

32 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Budget for 
Reengineering Plan: 



The budget for the originally proposed $1,126,726 contract 
with KPMG, including the subject $726,726 supplemental 
appropriation, is as follows: 



Contract with KPMG 


Hourly 
Rate 


Number 
of Hours 


Total 


Reengineering Plan 

Professional Fees 

Managing Director 
Project Manager 
Senior Consultants 
Consultants 
Analysts 
Sub-contractor 

Subtotal Professional Fees 
Deed Backlog Completion 
Professional Fees 

Managing Director 
Project Manager 
Senior Consultants 
Analysts 

Subtotal Professional Fees 
Total Professional Fees 
KPMG's Otber Expenses* 


$281.14 
$165.38 
$148.84 
$148.84 
$148.84 
$121.28 

$281.14 
$165.38 
$148.84 
$148.84 


32 
418 
408 
492 
504 

36 


8,997 
69,129 
60,727 
73,229 
75,016 

4,366 


1,890 

8 
422 
904 

144 


$291,464 

2,249 

69,790 

134,551 

21,433 


1,478 
3,368 


$228,023 

519,487 

88,439 


**Subtotal Reengineering/Backlog 




3,368 


$607,926 


Expanded Scope/Management Plan 

Professional Fees 

Managing Director 

Project Manager 

Senior Consultants 

Subtotal Professional Fees 
KPMG's Other Expenses 


$281.14 
$165.38 
$148.84 


240 
320 

200 


$67,474 
52,922 
29,768 


760 


$150,164 
22,500 


**Subtotal Management Plan 




760 


$172,664 


Estimates for 

Implementation of Reengineering Plan 

Professional Fees 

Managing Director 

Project Manager 

Senior Consultants 

Analysts 

Subtotal Professional Fees 
KPMG's Other Expenses 


$281.14 
$165.38 
$148.84 
$148.84 


200 

400 
400 
800 


$56,228 
66,152 
59,536 

119,072 


1,800 


$300,988 
45,148 


Subtotal Implementation Estimates 




1,800 


$346,136 


Total KPMG Contract 




5,928 


$1,126,726 


Less $400,000 included in FY 2000-01 Budget 






(400,000) 


Total Supplemental Appropriation 






$726,726 



* Other Expenses include mileage, parking, meals and housing. 
** Already expended or incurred (See Comment No. 1 below). 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

33 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



Comments on 

Reengineering Plan: 1. Of this total subject request of $726,726, according to 
Ms. Onyemem, KPMG has completed its work and 
incurred expenses for the first two components of this 
subject request, namely $207,926 for reducing the 
Assessor's backlog in processing deeds, and $172,664 for 
the expanded scope management plan. Therefore of this 
total subject request of $726,726 KPMG has already 
incurred expenditures of $380,590. 

2. The Budget Analyst notes that the Assessor's Office 
has incurred these additional costs of $380,590 without 
first obtaining prior appropriation approval by the Board 
of Supervisors. The Assessor-Recorder's Office did not 
have the authority to finalize an expanded contract with 
KPMG for such additional expenditures without first 
obtaining prior appropriation approval by the Board of 
Supervisors. Therefore, the Budget Analyst recommends 
that the proposed ordinance be amended to provide for 
retroactive authorization. 

3. According to Ms. Onyemem, the Assessors Office 
negotiated with the Controller's Office to include the 
original $400,000 contract with KPMG within a larger 
City contract with KPMG in order to begin a 
reengineering of the department's business practices as 
soon as possible. According to Mr. Hymel of the 
Controller's Office, additional services being performed 
by KPMG are being done under the Controller's City- 
wide audit contract with KPMG. Mr. Hymel advises that 
this contract, which was competitively bid and approved 
by the Civil Service Commission in May of 1999, allows 
the City to contract with KPMG for as needed auditing 
and accounting services. The contract with KPMG is a 
three-year contract with two one-year renewal options. 
Mr. Hymel advises that the original KPMG contractual 
services for the Assessor-Recorder is limited to $400,000, 
which was included in the FY 2000-2001 Assessor- 
Recorder budget and did not include this subject 
supplemental appropriation request of $726,726 of which 
KPMG has already incurred expenditures totaling 
$380,590. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

34 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



4. At its January 17, 2001 meeting, the Finance and 
Labor Committee requested that the Assessor-Recorder 
attempt to reduce the contractual services costs with 
KPMG and instead complete some of the contract work 
in-house. 

5. In order to reduce costs, related to the third component 
of KPMG's work, namely the Implementation of the 
Reengineering Plan, which KPMG was originally to have 
been paid $346,136, the Assessor now proposes KPMG to 
be paid $153,544 or $192,592 less as follows: 

(a) Development of Duties and 
Responsibilities Documents and Desk 

Procedures $100,285 

(b) Implementation of Reclassifications for 
Appraisers and Clerks 39,300 

(c) Related expenses 13.959 

Total $153,544 

The details of this reduced amount of $153,544 is shown 
in the Attachment provided by the Assessor-Recorder. 

6. Therefore the proposed supplemental appropriation 
ordinance for contractual service costs with KPMG 
should be reduced by $192,592 from $726,726 to 
$534,134. 

7. According to the Assessor-Recorder, the balance of the 
work needed to complete the Implementation of the 
Reengineering Plan of $192,592 would be handled by the 
Assessor's staff on an in-house basis. The Budget Analyst 
questioned whether the Assessor-Recorder Office has 
sufficient staffing at this time to dedicate employees to 
assist in implementing this reengineering plan without 
forgoing existing needs in the department. The Assessor- 
Recorder responded that her staff will just work harder 
to complete such additional work as well as to fulfill their 
existing responsibilities. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

35 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

Recommendations: 1. In accordance with Comment Nos. 5 and 6 above, 

reduce this proposed supplemental appropriation 
ordinance for contractual services with KPMG by 
$192,592 from $726,726 to $534,134. 

2. Amend the proposed ordinance to provide for 
retroactive authorization for costs previously incurred, 
without first obtaining prior appropriation approval from 
the Board of Supervisors in accordance with Comment 
No. 2 above. 

3. Approval of the proposed ordinance, as amended, is a 
policy matter for the Board of Supervisors because the 
Assessor-Recorder's Office did not have the authority to 
incur additional costs of $380,590 without first obtaining 
prior appropriation approval from the Board of 
Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

36 



Atta chm ent 



Contract with KPMG 


Hourly 


Number 


Total 




Rate 


of Hours 




Revised Estimates for 








Implementation of Reengineering Plan Components 








Professional Fees 








Managing Director 


$281.14 


22 


$6,186 


Project Manager 


S165.38 


344 


56,892 


Senior Consultants 


S 148.84 


314 


46,738 


Analysts 

Subtotal Professional Fees 


$148.84 


200 


29,769 


880 


$139,585 


KPMG Other Expenses at 10% of Professional Fees 
Total-Implementation Estimates 






13,959 


880 


S 153,544 



Source: Assessor-Recorder's Office 



37 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

Item 7 - File 01-0208 



Department: 



Item: 



Amount: 



Public Utilities Commission (PUC) 

Hetch Hetchy Water and Power (Hetch Hetchy) 

Ordinance appropriating $25,400,000 of Hetch Hetchy 
Operating Fund monies to fund the purchase of electrical 
power to meet municipal and contractual obligations for 
fiscal year 2000-2001. 

$25,400,000 



Description: 



Recommendation: 



Due to problems with Hetch Hetchy's computer system, 
the department was unable to provide the Budget Analyst 
with requested information. Therefore, Ms. Laurie Park, 
Acting General Manager of Hetch Hetchy, has requested 
that the Finance Committee continue the proposed 
supplemental appropriation for one week. 

Continue this item for one week as requested by Hetch 
Hetchy. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

38 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

Item 8 - File 00-2067 



Note: This item was re-referred to the Audit and Government Efficiency 
Committee by the Board of Supervisors at its meeting of January 16, 2001 
and was subsequently transferred to the Finance Committee because of 
concerns expressed about the Public Library utilizing a collection agency for 
delinquent accounts. 



Department: 
Item: 



Public Library 

Ordinance amending the San Francisco Administrative 
Code by adding Section 8.21-2 to authorize the Library 
Commission to revise certain fines and fees for the use of 
library materials and services and ratifying prior fines 
and fees. 



Description: 



The proposed ordinance amends Chapter 8 of the San 
Francisco Administrative Code by adding Section 8.21-2, 
to: 



• Add a fee schedule for overdue fines, library card 
replacement, processing fees, replacement of lost 
materials, lost/damaged fees, service fees, document 
delivery and special services. 

• Ratify prior fees and fines. 

Attachment I, provided by the Public Library, provides an 
overview of the Library's existing and proposed fines and 
fees, as contained in the proposed ordinance. 

Attachment II, provided by the Public Library, identifies 
the amount of change for each fine and fee and provides 
an explanation of the differences between the Public 
Library's existing fines and fees and the proposed fines 
and fees. According to Mr. George Nichols of the Public 
Library, the largest decrease in revenue would result from 
the elimination of both the $0.50 Interlibrary Loan Fee 1 



1 The $0.50 Interlibrary Loan Fee is currently charged to Public Library patrons when they request a 
book or other items that are not available in the San Francisco Public Library system. The 
Interlibrary Loan Fee covers the cost of notifying the patron that the material requested from 
libraries in other jurisdictions has been received by the Public Library and is available for loan. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

39 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 

and the $0.50 Reserve Fee 2 , which are proposed to be 
deleted in order to enhance the public's use of the 
Library's collection. According to Mr. Nichols, eliminating 
the Interlibrary Loan Fee and Reserve Fee will result in a 
revenue loss of approximately $16,000 annually. 

One of the proposed new fees is a $10 fee for the Recovery 
of Delinquent Accounts. The Public Library has recently 
contracted with the Unique Management Collection 
Agency, selected through a Request for Proposals process, 
to pursue delinquent accounts that are 90 days late, with 
a total value of at least $50.00 per account. According to 
Mr. Nichols, this new $10 Recovery of Delinquent 
Accounts Fee would cover the cost of the collection service 
as well as the Public Library's cost of processing returned 
materials. Of the $10 Recovery of Delinquent Accounts 
Fee, $8.95 would be paid to the collection agency and 
$1.05 would be kept by the Public Library. Mr. Nichols 
states that although the Public Library's purpose in 
implementing this collection program is to recover 
overdue books and materials, additional revenue will 
result from the Recovery of Delinquent Accounts Fee as 
well as from fines and fees paid when overdue materials 
are returned. Furthermore, Mr. Nichols states that costs 
would be avoided as returned materials would not have to 
be replaced. 

Comments: 1. As shown in Attachment III, provided by the Public 

Library, the estimated annual revenues to be realized 
from the Public Library's revised fine and fee schedule 
would be $537,626 which is approximately an increase of 
11.9 percent or $57,041 more than the actual fines and 
fees of $480,585 collected by the Public Library in FY 
1999-2000. 

2. Mr. Nichols states that the amount of fines and fees to 
be collected on an annual basis should fully recover the 
Public Library's costs including the costs paid to the 
collection agency as well as the Public Library's costs to 



2 The $0.50 Reserve Fee is currently charged to Public Library patrons when they request a book or 
other item that is stocked by the Public Library but is not available because it has been checked out. 
The Reserve Fee covers the cost of notifying the patron that the material requested has been 
returned, placed on reserve, and is available to be checked out. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
40 



Memo to Finance Committee 

February 21, 2001 Finance Committee Meeting 



replace lost, stolen, or damaged materials and other 
related processing costs. 

3. Attachment IV, provided by the Public Library, 
provides information as to how the proposed fines and 
fees were determined. According to Mr. Nichols, the 
proposed fines and fees schedule was approved on 
September 5, 2000 by the Library Commission. Mr. 
Nichols reports that the Public Library's fines and fees 
were last revised in 1994. 



Recommendation: 



4. According to Ms. Susan Hildreth of the Public Library, 
the only fine or fee not currently in effect is the $10 
Recovery of Delinquent Accounts Fee. 

5. According to Mr. Buck Delventhal of the City 
Attorney's Office, prior to the City's 1996 Charter, the 
Library Commission had the authority to set the Public 
Library's fines and fees. In accordance with the 1996 
Charter Section 2.109, the Board of Supervisors must 
approve by ordinance any rate, fee, or similar charge to be 
imposed by any City department. Currently there is no 
section in the City's Administrative Code for Library fines 
and fees. Mr. Delventhal states that the proposed 
ordinance would establish the fines and fees of the Public 
Library as well as ratify (a) the existing fines and fees and 
(b) the proposed revised fines and fees. 

Approval of the proposed ordinance is a policy matter for 
the Board of Supervisors. 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 




BOARD OF SUPERVISORS 
BUDGET ANALYST 

41 



ll'ffJOO 



LIBRARY FINES FEES 



Attachment I 
Pase 1 of T~ 





?.--• CURKfcNI. 




"PROPOSED I 
















ADULT TEENS 


JUVENILES 




ADULT TEENS 


JUVENILES 


FINES 


Per Day 1 Max | Per Day | Max 


Per Day | Max | | Per Day | Max | Per Day j Max 


Per Day I Max 


Books 


$ 0.10 I $ 5.00 I J - I $ - 


$ - I $ - | | $ 0.10 I $ 5.00 | $ - I $ - 


I . If . 


Phonorecords 


$ 0.10 1$ 5.00 1$ - 1$ - 


S - IS - I |S 0.10 I $ 5.00 | $ - IS - 


$ - l$ - 


Audio Cassettes 


$ 0.10 i $ 5.00!$ - !$ - 


$ - IS - i IS 0-10 


$5,001$ - IS - 


$ • IS - 


Books on Tape 


$ 0.10 . $ 5.00 i $ - I $ - 


S - IS • i IS 0.10 


$ 5.00 1 $ - | $ . 


S - IS ■ 


Compact Discs 


I I i 
$ 0.50 i $ 10.00 : $ - ! $ - 


s - Is - I Is 0.10 Is 5.00 Is • Is • 


s - 




Magazines 


$ 0.10 1 Cost » - i $ - 


S - IS - I IS 0.10IS 5.00 1$ • |$ . 


$ - 




Paperback (Cataloqued) 


$ 0.10 I $ 5.00 i $ - $ - 


S - IS - IS 0.10 1$ 5.00 1$ - |$ - 


$ • 




Paperback (Uncataloqued) 


I I i 

$ 0.10 I $ 0.50 I $ - ! S • 


$ - 


I 
$ i 


S 0.10 !$ 2.00 


, . ,. 


$ - 




Art Prints 


$ 1.00 I $ 10.00 ! $ - $ - 


$ - 




$ - 


s • 


s - Is • 


$ - 




Video & DVD 


$ 1.00 


i I 
$ 10.00 I $ 1.00 i $ 10.00 


$ 1.00 


$ 10.00 i 


$ 1.00 


S 5.00 


s - 




s - 




Supplemental Materials/Booklets 


$ 0.25!$ 3.00' 


$ - 


$ - 


IS - 


$ 


s - 




s - 




Sheet Music 


Varies 


Varies |$ • !$ • 


s - 


J 




$ 0.10 


$ 5.00 


s - 




s - 




Orchestral Material/Music Sets 


$ 0.25 I $ 10.00 ! $ - IS - 


s • 


r$ • 




s ::-. 


$ 10.00 


s - 




$ - !$ • 


Vertical File Materials 


$ 0.10 I $ 5.00 i $ - I $ - 


$ • l$ - | |$ 0.10;$ 5.001$ ■ 




$ ■ IS • i 



FEES 


Per Day 


Max 


Per Day 


Max 


Per Day 


Max 




Per Day 


Max 


Ptr Day 


Max 


Per Day 


Max 


Library Card Replacement 




S 2.00 




$ 0.50 


• 


$ 0.50 




.- 


$ 1.00 


_ > - 


$ 0.50 


--■■:- 


$ 0.50 


Visitors Card (Non-California Resident) 




$20.00 




$ 20.00 




$ 20.00 






$ 1000 


'■ ■'. .-. 


, . „ 




$ 10.00 


Processing fee (lost catalogued material) 


. '... 


$ 5.00 


t 


$ 5.00 I - 


$ 5.00 1 


.--- 


$ 5.00 s ■: 




$ 5.00 


Processing fee (lost uncatalogued material) 




$ 100 


■ - 


$ 200 I - - 


$ 2.00 1 


- .■-■■■ 


$ - 


t t rvt 


$ • 


Books by Mail 


?&\ 


$ - 


" » 


S - 




$ • 1 




$ 3.00 






$ 3.00 


Interlibrary Loan (ILL) 




$ 0.50 




$ 0.50 


■ - • 


$ 0.50 1 




$ • 




$ • 




$ • 


Reserve Fee 


' -.' ■•'■ 


$ 0.50 




$ 0.50 


1 r . . 


$ 0.50 




■"-.-. 


$ - 




$ ■ 


-;_."■ 


s • 


Returned Check Fee 


perChk. 


$ 10.00 


S 10.00 | 


N/A 1 I perChk. 


$ 10.00 


■ ' 


$ 10.00 


i-jTVC 


N/A 


Recovery of Delinquent Accounts 


. 


$ - 






\ 


i i perAcct 


$ 10.00 






: 


1 
1 


Interlibrary Loan (ILL) Photocopy Fee 


per page 


$ 0.15 


per page: $ 0.15 


per page 


$ 0.15 : | per page! $ 0.25 


pa pane 


$ 0.25 


per page 


$ 0.25 ; 


SF History Center Photocopy Fee 


per photc 


$ 1.00 


per photo $ 1.00 i per photc 


$ 1.00i ! per photo $ 1.00 


per photc 


$ VOOlparpnotdS 1.00 1 


SF History Center Reproduction Fee 




$ 15.00 | 2 


$ 15.00 | 


$ 15.00 |H 


$ 15.00 | 


s -;:: 


Barcode Label 


J - 


$ 0.25 


- i$ 0.25 I " 


$ 0.25 I 


$ 0.25 


■ 


$ 02SH9 


$ 0.25! 


Damaged Barcode & Flyleaf 




$ 


IS - I 


$ - | 


. : 


$ 1.00 




$ 1.00 


::±3.~- 


$ 1.00 I 


Crayoning a single page 




$ 0.25 




$ 0.25 I r 


$ 0.25! 


- 


$ • 




$ • 




$ - 


Damaged Date Due Slip 




$ 0.10 




$ 0.10 


' 


$ 0.10 I 




$ - 




$ - 




$ - 


Damaged Mylar Book Cover 


IS 0.25 




$ 0.25 




$ 02! 


. 


$ - 




$ - I 


$ • 


Damaged Plastic PD Sleeve 




|$ 1.00 


! ; 


$ 1.00 


! / 


s 1.00 


1 




$ - 




I. • 




I 
$ - 



Source: SF Public Library 



42 



LIBRARY FINES FEES 



Attachment I 
Page 2 of T~ 





ADULT TEENS JUVENILES 


ADULT 


TB 


ENS 


JUVEI* 


1ILES 


REPLACEMENT COSTS 


Perltem| Max | Per ltem| Max (Per ltem| Max | 


Per Item] Max | Per Item] Max (Per Itemj Max | 


Hardback Non-fiction 


$ 25.00 ; S 30.00 1 S 25.00 i $ 30.00 1 $ 12.00 I $ 17.00 I 


I $ 35.00 I $ 40.00 | $ 35.00 I $ 40.00 | $ 20.00 


S 25.00 | 


Hardback Fiction 


$ 18.00 ! S 23.00 I S 18.00 I $ 23.00 I S 12.00 ! S 18.00 i 


I $ 25.00 I $ 30.00 I $ 25.00 | $ 30.00 | $ 15.00 


$ 20.00 


Paperback Catalogued Non-fiction 


S - I S 15.00 I $ - IS 15.00 IS - I $ 10.00 I 


I $ 20.00 I $ 25.00 | $ 20.00 I $ 25.00 | $ 10.00 | $ 15.00 


Paperback Catalogued Fiction 


$ - i $ 5.00 ; $ - IS 5.00 IS - IS 5.00 ! 


i $ 10.00 | $ 15.00 


S 10.00 ! $ 15.00 I $ 5.00 | $ 10.00 


Paperback Uncatalogued 


$ 5.00 : S - I $ 5.00 $ - I S 5.00 1 $ - ! 


I $ 5.00 I $ - 


$ 5.00 | $ - | $ 5.00 I $ - 


PB/HB International Generic Record 


$ 5.00 I $ 10.00 I S 5.00 I S 10.00 IS 5.00 I S 10.00 i 


I $ 5.00 | S 15.00 I $ 5.00 | $ 15.00 I $ 5.00 I $ 15.00 


Periodicals/Magazines 


S 3.00 i S - i$ 3.00 ! $ - IS 3.00 i $ - 


! S 5.00 ! $ - IS 5.00 i$ - | $ 5.00 I $ - 


Phonorecords 


S 9.00 i $ - IS 9.00 i $ - IS 9.00 1 S • 


i $ 15.00 | S 20.00 I S 15.00 j $ 20.00 | $ 15.00 | $ 20.00 


Audio Cassettes 


$11,00 1$ - !$ 11.00 1$ - 1$ 11.00 1$ - 


I $ 10.00 i $ - | $ 10.00 |$- |$ 10.00 | $ - 


Videos 


VARIES 1 VARIES 1 VARIES ' VARIES 1 VARIES 1 VARIES 


I $ 20.00 I $ 25.00 | $ 20.00 | $ 25.00 j S 20.00 | S 25.00 


Digital Video Disc (DVD) 


S - I $ - i $ - i $ - i $ - 1 $ - 


| $ 20.00 | $ 25.00 


$ 20.00 I $ 25.00 I $ 20.00 


$ 25.00 j 


Audio Books 


$ 5.00 1 per tape i $ 5.00 1 per tape 1 $ 5.00 | per tape 


| $ 5.00 I pertape 


S 5.00 I per tape | $ 5.00 


pertape 


Sheet Music Scores 


1 SET BY ART DEPARTMENT 1 


| SET BY ART DEPARTMENT | 




Sheet Music (Uncatalogued) 


i SET BY ART DEPARTMENT 1 


| SET BY ART DEPARTMENT I 


Sup. Materials (I.e., booklets, maps, etc.) 


$ 3.00 M . |$ 3.00 | -i-- : ---|$ 3.00|--~- : 


! $ 3.00 bW-sj 


S 3.00 PaijpS; 


$ 3.00 |iS^>:r: 


Compact Discs 


VARIES 1 i VARIES 1 1 VARIES 1 


| $ 15.00 | $ 20.00 


$ 15.00 | S 20.00 


$ 15.00 | $ 20.00 


Language Sets 


$ 10.00 I" -'"- | $ 10.00 I ' 


$ 10.00 l-^i-- 


j S 10.00 \y^T&-: 


$ 10.00 


■i "SS?S 


$ 10.00 1 1 -. --- 


Vertical File/Picture File 


$ 2.00 I--. |S 2.00 | , 


$ 2.00 K 


|$ 5.00 !=• s-^i 


$ 5.00 


■- --'-.= 


$ 5.00 ; \ ' 


Lost Audio Cassette Case 


$ 1.00 I ,. 


L$ 1.00 




$ 1.00 | -: - 


IS 1.00 r^sa^ 


$ 1.00 


ri£§=*3 


$ 1.00 


SSJeS ~ 


Lost Videocassette Case 


S 3.00 I - - 


$ 3.00 




$ 3.00 I '-- 


i $ 2.00 ys^gjg 


$ 2.00 


~i - ~ 


$ 2.00 


■i 7 :^- 


Lost CD Jewel Case 


$ - I ■■-■■ -IS - I ",-: 


$ - m - 


i$ loo r. .--^.-.■<-- 


$ 1.00 


:lv^_v 


S 1.00 t- v^- 



Source: SF Public Library 



43 



\3Hfion 






LIBRARY FINES FEES 


Attachment 11 
Paere 1 ot 2 




':.^y-:-,;. ;;.,,, *.>,-.-•. ^■^"'■'■H 


FINES ; I Per Day) Max | Per Day] Max | Per Day| Max | 


1 Books 1$ - . i$ ■ S - ! 


S • IS - 1 


s - 1 


Phonorecords IS - ' S • ' S - ' 


1 • IS - 1 


s • 


Audio Cassettes 1 | S - ! S - $ - 1 


S • IS - 1 


s - ! 


Books on Tape 1 $ - ! S • i - 1 


s ■ is - 1 




Compact Discs 1 $ (0.40) i S (5.00)' $ - 1 


, - Is - 1 


Daly and maaimum bias reduced so tnat tney wl be consistent witn other daly 
( * land maunum ftr.es. 


Maqazines 1$ - I VARIES S - 1 


S - IS - i 


J - Maximum Una changed so mat It wipe comment with other maiimura tnte. 


Paperback (Catalogued) t - 


S - l$ - i 




Paperback (Uncataloqued) 


[S - >S 150 : $ - ! 


, . 1. . 


Maun urn fine Increased at an incentive for paffor.s Is return material a a emery 
S • manner. Currant mailmum ot $0.50 is not sufficient. 


i Art Prints 


S IS 


S - Oont hava an prints m circuiaQon anymore. 


Video & DVD 


I I 

I ' I 

S - i S (5.00): S (1.00)1 


S(10.00) 


$ (1.00) 


AduP. maunum ana reduced to mate £ consistent trith other maonun lata. Fact 
jtbninatad lor chsiren and latns consistent with poky nol to Oiarga lata Ittt to 
S (10 00) thia group ol users. 


Supplemental Materials/Booklets 


S - I 


S - Hams artnl catalogued and ara not ncted Fines nol generaty asstssad. 


Sheet Music 


1 VARIES ; VARIES : S - 




s - 


Daly and maximum Unas changed so that they would ta continent «w other dae> 
$ and maximum (lots. 


Orchestral Material/Music Sets IS - IS • S - ! 




s - 


s - 1 


Vertical File Materials | 1 S - IS - S - i 


S IS 


s - 1 




FEES 


Per Day 


Max I Per Day 


Max 


Per Day 


EXPLANATION OF CHANGE 


Library Card Replacement 




S (1.00) 




s • 




purcnaseig a debit card 'or St 00 and registering it as a etwarv card Re; srate- is 
iret Thi Ubrary w* contnua Is cnarga SI 00 to pawnt who ds aot want 10 ouya 
S deb* card 


Visitors Card (Non-California Resident) 




S (10.00) 




S (10.00) 




te nctudct SI0 refundable depott ater 3 months. Depose, was mposad 
to ensure return of materials Currently, mcst non-Stiia cards are issued lor 
$(10.00) witemel access and notlsroooU. Ccnxeouency. ana deposit * not rtourad. 


Processing fee (lost catalogued material) 




S ■ I 


s - 




S - i 


Processing fee (lost uncatalogued material) 1 


•- 


S [2jOO)I 


S (100) 


S (2.00) coded 


Books by Mail 




I 
S 3.00 I 


S 3.00 




New lee Covers cost of snipping and ranging ol pools ffiat ara mated to pama* 
S 3.00 Actual amount charge wii be S3 o- the actual cost of snipping and nandaeo. 


Interlibrary Loan (ILL) 


; 


i .. . 

S (0.50)! 


S (0.50) 


' 


Fee eammaied to enhance the use olthe coaactssn and to enprsve put* serve*. 
S (0.50) fees deter patrons from access to eoleewn. Vary mmenat impact on revenue 


Reserve Fee 




S (0.50) 




S (0.50) 




Fees deutr patrons txm access to co section. Very mourn aJ en pact on re ve nut 
Met: reserves are made ma eraea/computer eamoabng Ova coat of post card and 
S (0.50) postage. 


Returned Check Fee 




s - 


' 


N/A I 


| Recovery of Delinquent Accounts ! per AcdJ S 10.00 j 


s • 




New lee. Ltorary has contracted e« a coitction servxe to pursua matanata Ml 
$ are 90 dayi late and valued over SSfl. 


i Interlibrary Loan (ILL) Photocopy Fee | per page! $ 0.10 i per page 


S 0.10 I per page 


S 0.1C increased Is reflect cost ol espying. 


I SF History Center Photocopy Fee | per photc S - ; per photc 


S | perphob 


s - 


I SF History Center Reproduction Fee I S - I 


S • I 


s - 


Barcode Label 


IS • i 


s - 


- 


s - 


Damaged Barcode & Flyleaf 


■IS 1.00 I 


S 1.00 




S 1.00 labor eitenslve process a* bar code is damaged 


Crayoning a single page 


I S (0.25) i 


S (025) 




Fm e --mated as 4 a dtfGcus or enposaitua to detarmeie whether damage was a 
S (0.25) pre-exrstrg condition. Admirusffatrveiy u na a lorca able. 


Damaged Date Due Slip 




S (0.10)1 • 


S (0.10) 




Fee eemwated as « bj diflciil or enpsuaie to determine whether damage was a 

$ (0.10) pre-aiutng condition. Adraimstratrvaiy «nenlorceab« 


Damaged Mylar Book Cover 


" " - IS (0.25)! 


S (0.25) 




Fee etrruhated as it a til<ut or enpotsibw. to dettrmm* w he mar damage was a 
$ (0.25) pre-eiotng condition. Ad ewHHalioS) earnifcrceabie 


Damaged Plastic PD Sleeve 


| S (1.00); 


S (100 


- ■ 


Fee eimmaled as » is dimcue. or enpotSJOie to dete— i-e vrtether damage mi 
S (1 .00) prt-exisung condWoa. Admnitntvety unentorceab* 


-ME00008.xls 

44 


Source: SF Public Library 



ftLi.aciU'JKLlL . 

Pa<*e T of 2 



JK-.O00 




LIBRARY FINES FEES 








g^^^-^a^aiia^i^illggg^^gaBg-agsasBsa | 


EXPLANATION OF CHANGE 


REPLACEMENT COSTS 


Perltem| Max | Per Item] Max | Per ltem| Max | 


EXPLANATION OF CHANGE 


Hardback Non-fiction 




$ 10.00 ; $ 10.00 i $ 10.00 | $ 10.00 IS 8.00 I $ 8.00 I 


Hardback Fiction 




$ 7.00 i $ 7.00 ! $ 7.00 I $ 7.00 IS 3.00 I S 100 1 


Paperback Catalogued Non-fiction 




$ 20.00 i S 10.00 I $ 20.00 i $ 10.00 I $ 10.00 I $ 5.00 ! 


Paperback Catalogued Fiction 




$ 10.00 I S 10.00 i $ 10.00 I $ 10.00 I S 5.00 I $ 5.00 j 


Paperback Uncatalogued 




$ - is - Is - IS - IS - IS - I 


PB/HB International Generic Record 




S - !$ 5.00 ' S - IS 5.00 | $ - |$ 5.00 : Revised amounts reflect current replacement costs for various materials. 


Periodicals/Magazines 




$ 2.00 i $ - i$ ZOO'S - IS 2.00 I $ - iThese amounts are used only when materials cannot be located or found 


Phonorecords 




S 6.00 i $ 20.00 S 6.00 ! $ 20.00 j S 6.00 i $ 20.00 llhrough a bibDographic services such as Amazon.Com or Bowkers Annual. 


Audio Cassettes 




$ (1.00)1 S - 1$ (1.00)1$ - |$ (1.0O)| S - 1 Estimated that less than 5% of materials cannot be located through these 


Videos 




VARIES ! VARIES 1 VARIES ! VARIES 1 VARIES j VARIES sources. The Library will assess fair market value for lost items based on 


Diqital Video Disc (DVD) 




$ 20.00 I S 25.00 i S 20.00 I S 25.00 ! S 20.00 | $ 25.00 quotes from bibliographic sources. Replacement charges are in addition to 


Audio Books 




$ - | N/A I S - 1 N/A i S - 1 N/A 1 processing fees. 


! Sheet Music Scores 




j NO CHANGE 1 


Sheet Music (Uncatalogued) 




i I NO CHANGE 




Sup. Materials (I.e., booklets, maps, etc.) 




s . ]■■- |s - l v .- -..—-Is - 


■---.- . : " | 


Compact Discs 




VARIES 1 $ 20.00 1 VARIES 1 $ 20.00 1 VARIES 


$ 20.00 iNewfee. DVDs a growing part of the Library's circulation. 


Lanquage Sets 




$ - |v ■■■:■: 


s - 




$ - 






Vertical File/Picture File 




S 3.00| - 


$ 3.00 




$ 3.00 


■ : " 




I Lost Audio Cassette Case 




$ - 1 - 


S - -: 


$ - 






i Lost Videocassette Case 


1$ [1.00)1 


$ (1.00)1 . 


$ (1.00) 


-■:■ - 




! Lost CD Jewel Case 


|$ 1.00 1 


$ 1.00 | 


S 1.00 


~-'.'~ ■ 





Source: SF Public Library 



45 



'2/15/01 



DEPARTMENTAL REVENUE 
Public Library 



Attachment III 



ACTUAL PROJECTED 

FY 1 999-2000 ANNUAL REVENUE 



Books Paid 
Fines & Fees 
Reserves 
ILL Fee 



43,261 


$ 


41,548 


418,819 


$ 


479,512 


14,814 


$ 


14,901 


3,691 


$ 


1.665 



480,585 $ 



537,626 



FY 1999-00 per FAMIS. 

No decreases in departmental revenues are expected as a result of the proposed 

fine and fee schedule. 






he 



Attachment IV 
jus Page 1 of ?. 

■'i . SUPPLEMENTAL MATERIAL 

FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION 

December 19, 2000 



FINES & FEES 

How were fines & fees determined? What process did the library qo through to 
determine the new fee schedule? 

The revision of the fines and fees schedule has been under consideration by the Library 
for more than seven years (since 1994). The key factors considered in this review 
were customer-friendly policies and policies that best protected the Library's collection. 
Fines and fees schedules for other public libraries in the Bay Area were surveyed to 
determine regional benchmarks and best practices in this area. The impact of newer 
formats, services and technologies also was a determining factor in revising the fines 
and fees schedule. For example, the implementation of a vendor-supplied debit card - 
which provides library cards with $1 .00 photocopy value for the price of $1 .00 - was 
inconsistent with the standard library charge of $2 for a replacement library card. Other 
new services include the implementation of a collection recovery program aimed at 
protecting the collection (see below for details) and a books-by-mail service for 
customer convenience. 

The fines & fees schedule was determined after many meetings of the public services 
staff and review and approval by the Library Commission at several public meetings. 
The proposed schedule reflects modern techniques of pricing materials and includes 
new media formats (DVD). One of the most important changes for customer service is 
the elimination of the $.50 charge for reserves for materials owned by the Library and 
materials borrowed from other libraries. Elimination of this charge makes the entire 
collection available for anyone's use, no matter which branch they choose to visit. The 
proposed fines and fees schedule was devised to serve as an incentive plan to return 
materials in a timely manner. 

What is the relationship between the fines assessed and the cost to the library? 

Fines for overdue materials act as an abatement to the cost of sending out notices that 
remind people to return their materials. The cost of replacement of lost materials has 
been modified to reflect that the most up-to-date information sources will be checked to 
determine that cost. If that information is not available, then a default "standard price" of 
materials will be used, which is based on current average pricing for materials. The 
application of a consistent "processing fee" attempts to recover a portion of the library's 
investment in the average cost of cataloging and processing materials. If there is no 
processing or cataloging (i.e. paperback books), we are recommending that the 
processing fee not be applied. 

The Library's Mission Statement states "The Library is dedicated to free and equal 
access to information...." To effect this mission, the public and the staff believe that it is 
in the best interest of the library to make all of its materials accessible via reserves to all 
patrons for free. Similarly, since we are not charged for the interlibrary loan of books 
from other libraries, the staff and public believes the Library should not charge 
customers for access to the materials of other libraries. 



Source: SF Public Librarv 



Attachment IV 
Pape 'I of 2 
SUPPLEMENTAL MATERIAL 
FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION 

December 19, 2000 



How will the collection program work? Who gets referred and what criteria will be 
used? 

Customers who have not returned materials worth more than $50.00 that are more than 
45 days overdue will be electronically sent to the Collection Agency by the Library's 
automated system. Currently, library customers receive only one notice when material is 
overdue. With the Collections process, the Library will implement a second overdue 
notice to alert customers that not returning materials may result in the referral of their 
account to a collection agency. We have a written agreement with the Tax Collector to 
assume this collection duty through a third party library vendor. We believe that lowered 
fines and fees combined with a collection agency program will stimulate both the use 
and the return of library items. 



Source: SF Public Library 



5.25 




*/>/ 



[All Committees] 

City and County of San Francisco S°Y e ™I! lent Document Section 

J J ~ Main Library 

Meeting Minutes 
Finance Committee 

Members: Supervisors Mark Leno, Aaron Peskin and Matt Gonzalez 

Clerk: Gail Johnson 

Wednesday, February 28, 2001 10:00 AM City Hall, Room 263 

Regular Meeting 

Members Present: Mark Leno, Aaron Peskin, Matt Gonzalez. 



DOCUMENTS DEPT 

MEETING CONVENED 

MAR 

The meeting convened at 10:08 a.m. SAN FRANCISCO 

PUBLIC LIBRARY 

002067 [Library Fines and Fees] 
Supervisor Newsom 

Ordinance amending the San Francisco Administrative Code by adding Section 8.21-2 to authorize the Library 

Commission to charge certain fines and fees for the use of library materials and services and ratifying prior 

fines and fees. 

1 1/20/00, ASSIGNED UNDER 30 DAY RULE to Audit and Government Efficiency Committee, expires on 12/20/2000. Sponsor: 

Supervisor Kaufman 

1/2/01, RECOMMENDED AS COMMITTEE REPORT. Heard in Committee. Speakers: Susan Hildreth, City Librarian; Supervisor 

Katz; Peter Warfield. 

To Board as Committee Report January 2, 2001. 

1/2/01 , PASSED, ON FIRST READING. Supervisor Newsom requested to be added as co-sponsor. 

1/16/01, SEVERED FROM CONSENT AGENDA. Supervisor Yee requested this matter be severed so it could be considered separately. 

1/16/01, RE-REFERRED to Audit and Government Efficiency Committee. 

2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

2/21/01, CONTINUED. Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Susan Hildreth, Acting City Librarian; Dorothy 

Copely, Public Library; Edward Harrington, Controller; George Nichols, Finance Director, Public Library; James Chafee; Theodore 

Lakey, Deputy City Attorney; Peter Warfield; Nicole Termini; Deetje Boler; Michael FaiTah, Legislative Assistant to Supervisor 

Newsom. 

Continued to 2/28/01. 

Heard in Committee. Speakers: Susan Hildreth, Acting City Librarian; James Chafee; Timothy West, Field 
Representative, Local 790; Peter Warfield; Deetje Boler; George Nichols, Finance Director, Public Library. 
Amended on page 5 by adding Section 2, listing the conditions under which the Board of Supervisors is 
approving the agreement between the Public Library and Unique Management Collection Agency for the 
recovery of delinquent accounts. 
AMENDED. 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 2 - Leno, Peskin 
Noes: 1 - Gonzalez 



City and County of San Francisco I Printed at 7:38 PM on 3/1/01 



Finance Committee 



Meeting Minutes 



February 28, 2001 



010105 [Geographic Information System Data License Fees] 

Ordinance amending the San Francisco Administrative Code by adding Section 8.40 to authorize the 
Department of Public Works to charge license fees for the use of the City's Base Map Geographic Information 
System ("GIS") data and ratifying prior fees. (Public Works Department) 
1/17/0!, RECEIVED AND ASSIGNED to Transportation and Land Use Committee. 
2/1/01, TRANSFERRED to Finance Committee. New committee structure. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Douglas Legg, Finance and Budget Division, 
Department of Public Works; Jeffrey Johnson, Office of Geographic Data Services, Department of Public 
Works; Denise Brady, Deputy Director, Department of Telecommunications and Information Services; Erin 
McGrath, Mayor's Budget Office, Theodore Lakey, Deputy City Attorney. 
CONTINUED TO CALL OF THE CHAIR by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010252 [Reserved Funds, PUC-Water Department! 

Hearing to consider release of reserved funds, Water Department (fiscal year 2000-2001 budget), in the amount 
of $51 1,891, to fund overtime expenditures, especially in responding to emergencies such as mam breaks and 
service line leaks. (Water Department) 
2/7/01, RECEIVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Kingsley Okereke, Director of Finance, Public 
Utilities Commission; John Mullane, General Manager, Public Utilities Commission. 
Release of reserved funds in the amount of $51 1,891 approved. 
APPROVED AND FILED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010208 [Government funding, Hetch Hetchy's power purchases) 

Ordinance appropriating $25,400,000 of Hetch Hetchy Operating Fund to fund the purchase of power to meet 
municipal and contractual obligations for fiscal year 2000-01. (Controller) 

(Fiscal impact.) 

1/31/01 , RECEIVED AND ASSIGNED to Finance Committee. 
2/21/01, CONTINUED. Heard in Committee. Speakers: None. 
Continued to 2/28/01. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Laurie Park, Acting General Manager, Hetch 

Hetchy Water and Power; Ken Bruce, Budget Analyst's Office; Theodore Lakey, Deputy City Attorney; 

Theresa Mueller, Deputy City Attorney; John Bardis. 

Amendment of the Whole prepared in Committee, v,hich amended funding sources and placed SI, 781,912 on 

reserve. 

(Hetch Hetchy was requested to provide a report to the Finance Committee on the status of Hetch Hetchy's 

projected deficit for the purchase of electrical power for resale by May 1, 2001.) 

AMENDED, AN AMENDMENT OF THE WHOLE BEARING NEW TITLE. 

Ordinance appropriating $25,400,000 of Hetch Hetchy Operating Fund to fund the purchase of power to meet 

municipal and contractual obligations for fiscal year 2000-01; placing $1,781,912 on reserve. (Controller) 

(Fiscal impact.) 

RECOMMENDED AS AMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 7:38 PM on 3/1/01 



Finance Committee 



Meeting Minutes 



February 28, 2001 



010145 [Sublease of Treasure Island Brig Facility for Sheriffs Department] 

Resolution approving a sublease, retroactive to July 1, 2000, between the City and County of San Francisco 
(The "City") and the Treasure Island Development Authority (The "Authority") for certain property on 
Treasure Island commonly known as the Brig (Buildings 670 and 671) located at the corner of 13th and M 
Streets on Treasure Island, for an annual rent not to exceed 5250,000 per year. (Real Estate Department) 

(Fiscal impact.) 

1/24/01, RECErVED AND ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Michael Hennessey, Sheriff; Jean Mariani, 
Chief Financial Officer, Sheriffs Department; Annemarie Conroy, Executive Director, Treasure Island 
Development Authority; Anthony Delucchi, Director of Property, Real Estate Division, Administrative Services 
Department. 
Continued to 3/14/01. 
CONTINUED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010270 [Appropriation, funding for earthquake relief to India] 
Mayor, Supervisor Peskin 

Ordinance appropriating 5100,000 from the General Fund Reserve for the Indo-American Trade and 
Commerce Council's Gujarat Earthquake Relief Fund for fiscal year 2000-01. 
2/12/01, RECEIVED AND ASSIGNED to Finance Committee. 
Heard in Committee. Speaker: Harvey Rose, Budget Analyst. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



010273 [Appropriation, funding the increase of services of the Budget Analyst] 
Supervisors Ammiano, Gonzalez 

Ordinance appropriating $218,208 of the General Reserve Fund to fluid the increase of services provided by 

the Board of Supervisor's Budget Analyst for fiscal year 2000-01. 

2/12/01, RECEIVED AND ASSIGNED to Finance Committee. 

2/20/01 , SUBSTITUTED. Supervisor Ammiano submitted a substitute ordinance bearing same title. 

2/20/01, ASSIGNED to Finance Committee. 

Heard in Committee. Speakers: Supervisor Ammiano; Ken Bruce, Budget Analyst's Office; Edward 
Harrington, Controller. 
RECOMMENDED by the following vote: 
Ayes: 3 - Leno, Peskin, Gonzalez 



City and County of San Francisco 



Printed at 7:39 PM on 3/1/01 



Finance Committee Meeting Minutes February 28, 2001 



010223 [Transfer of state funds to improve access to mental health treatment for children in foster care and 
other children placed outside of San Francisco) 

Resolution endorsing the transfer of state general funds from the state to the California Mental Health Directors 

Association for a contract to provide services to foster care and other Medi-Cal eligible children placed outside 

of San Francisco. (Public Health Department) 

2/2/01, RECEIVED AND ASSIGNED to Public Health and Environment Committee. 

2/22/01, TRANSFERRED to Finance Committee. 

Heard in Committee. Speakers: Harvey Rose, Budget Analyst; Dr. Albert Eng, Department of Public Health. 
RECOMMENDED., by the following vote: 

Ayes: 3 - Leno, Peskin, Gonzalez 



ADJOURNMENT 

The meeting adjourned at 1:51 p.m. 



City and County of San Francisco 4 Printed at 7:39 PM on 3/1/01 



1 
a.8/01 



CITY AND COUNTY 




BOARD OF SUPERVISORS 



[Budget Analyst Report] 

Susan Horn 

Main Library-Govt. Doc. Section 



ofsanfrancisccOOCUMENTS DEPT 
FEB 2 8 202) 



SAN FRANCISCO 
PUBLIC LIBRARY 

1390 Market Street, Suite 1025, San Francisco, CA 94102 (415) 554-7642 



BUDGET ANALYST 



FAX (415) 252-0461 



February 22, 2001 



TO: ^Finance Committee 

FROM: /Budget Analyst 

SUBJECT: February 28, 2001 Finance Committee Meeting 

Item 1 -File 00-2067 

Note: This item was continued by the Finance Committee at its meeting of 
February 21, 2001. 



Department: 
Item: 



Description: 



Public Library 

Ordinance amending the San Francisco Administrative 
Code by adding Section 8.21-2 to authorize the Library 
Commission to revise certain fines and fees for the use of 
library materials and services and ratifying prior fines 
and fees. 

The proposed ordinance amends Chapter 8 of the San 
Francisco Administrative Code by adding Section 8.21-2, 
to: 

• Add a fee schedule for overdue fines, library card 
replacement, processing fees, replacement of lost 
materials, lost/damaged fees, service fees, document 
delivery and special services. 



Ratify prior fees and fines. 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



Attachment I, provided by the Public Library, provides an 
overview of the Library's existing and proposed fines and 
fees, as contained in the proposed ordinance. 

Attachment II, provided by the Public Library, identifies 
the amount of change for each fine and fee and provides 
an explanation of the differences between the Public 
Library's existing fines and fees and the proposed fines 
and fees. According to Mr. George Nichols of the Public 
Library, the largest decrease in revenue would result from 
the elimination of both the $0.50 Interlibrary Loan Fee 1 
and the $0.50 Reserve Fee 2 , which are proposed to be 
deleted in order to enhance the public's use of the 
Library's collection. According to Mr. Nichols, eliminating 
the Interlibrary Loan Fee and Reserve Fee will result in a 
revenue loss of approximately $16,000 annually. 



One of the proposed new fees is a $10 fee for the Recovei 
of Delinquent Accounts. The Public Library has recently 
contracted with the Unique Management Collection 
Agency, selected through a Request for Proposals process, 
to pursue delinquent accounts that are 90 days late, with 
a total value of at least $50.00 per account. According to 
Mr. Nichols, this new $10 Recovery of Delinquent 
Accounts Fee would cover the cost of the collection service 
as well as the Public Library's cost of processing returned 
materials. Of the $10 Recovery of Delinquent Accounts 
Fee, $8.95 would be paid to the collection agency and 
$1.05 would be kept by the Public Library. Mr. Nichols 
states that although the Public Library's purpose in 
implementing this collection program is to recover 
overdue books and materials, additional revenue will 
result from the Recovery of Delinquent Accounts Fee as 
well as from fines and fees paid when overdue materials 
are returned. Furthermore, Mr. Nichols states that costs 



1 The $0.50 Interlibrary Loan Fee is currently charged to Public Library patrons when they request a 
book or other items that are not available in the San Francisco Public Library system. The 
Interlibrary Loan Fee covers the cost of notifying the patron that the material requested from 
libraries in other jurisdictions has been received by the Public Library and is available for loan. 

2 The $0.50 Reserve Fee is currently charged to Public Library patrons when they request a book or 
other item that is stocked by the Public Library but is not available because it has been checked out. 
The Reserve Fee covers the cost of notifying the patron that the material requested has been 
returned, placed on reserve, and is available to be checked out. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

would be avoided as returned materials would not have to 
be replaced. 

Comments: 1. As shown in Attachment III, provided by the Public 

Library, the estimated annual revenues to be realized 
from the Public Library's revised fine and fee schedule 
would be $521,060 which is approximately an increase of 
8.4 percent or $40,475 more than the actual fines and fees 
of $480,585 collected by the Public Library in FY 1999- 
2000. 

2. Mr. Nichols states that the amount of fines and fees to 
be collected on an annual basis should fully recover the 
Public Library's costs including the costs paid to the 
collection agency as well as the Public Library's costs to 
replace lost, stolen, or damaged materials and other 
related processing costs. 

3. Attachment rV, provided by the Public Library, 
provides information as to how the proposed fines and 
fees were determined. According to Mr. Nichols, the 
proposed fines and fees schedule was approved on 
September 5, 2000 by the Library Commission. Mr. 
Nichols reports that the Public Library's fines and fees 
were last revised in 1994. 

4. According to Ms. Susan Hildreth of the Public Library, 
the only fine or fee not currently in effect is the $10 
Recovery of Delinquent Accounts Fee. 

5. According to Mr. Buck Delventhal of the City 
Attorney's Office, prior to the City's 1996 Charter, the 
Library Commission had the authority to set the Public 
Library's fines and fees. In accordance with the 1996 
Charter Section 2.109, the Board of Supervisors must 
approve by ordinance any rate, fee, or similar charge to be 
imposed by any City department. Currently there is no 
section in the City's Administrative Code for Library fines 
and fees. Mr. Delventhal states that the proposed 
ordinance would establish the fines and fees of the Public 
Library as well as ratify (a) the existing fines and fees and 
(b) the proposed revised fines and fees. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 
3 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

6. Ms. Hildreth was requested to report back to the 
Committee with respect to the Committee's concerns 
pertaining (a) to the collection agency contract and 
procedures and (b) various other Library policies and 
procedures. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

4 



'Attachment I 
Paze 1 of 2 



„ viwaa. 








LIBRARY FINES FEES 










- "—{3 w 










ss»^s^5sa 


iBUsfcayi 




BlH 




ADULT 


TEENS 


JUVENILES 


ADULT TEENS 


JUVENILES 


FINES 


Per Day | Max | Per 


Day | Max 


Per Day | Max | | Per Day | Max 


Per Day | Max 


Per Day I Max 


Books 


S 0.10 IS 5.00 | $ 


- IS - 


S - IS - I IS 0.10 IS 5.00 


S - IS - 


$ - |$ - 


Fhonorecords 


S 0.10 | S 5.00 I S 


- IS - 


S - |S - I IS 0.10IS 5.00 


s - is - 


s - Is - 


Audio Cassettes 


S 0.10 I S 5.00 


S 


- is - 


S - IS - | 


S 0.10 |S 5.00 


s - Is - 


S - IS - 


Books on Tape 


S 0.10 I $ 5.00 


s 


- IS - 


s - Is - | • 


S 0.10 I S 5.00 


s - is - 


$ - IS - 


Compact Discs 


I 
S 0.50 | S 10.00 


$ 


- is - 


S - 1 S - 1 1 S 0.10 1 S 5.00 1 $ - 


s - 


S - 13 - 


Magazines 


S 0.10 I Cost i i 


- IS - 


S - |S - MS 0.10 IS 5.00 Is - 


s - 


s - 


s - 


Paperback (Catalogued) 


S 0.10 I S 5.00 | S 


- IS - 


S - IS - I 


S 0.10 | S 5.00 | S - 


s - 


s - 


s - 


Paperback (Uncatalogued) 


S 0.10 


S 0.50 


s 


- Is - 


s - 


. . I 


S 0.10 ! S 2.00 


s - 


s - 


s - 


s - 


Art Prints 


S 1.00 | S 10.00 


I 


- is - 


s - 


S • I 


s - Is - 


s - 


s - 


s - 


s - 


Video & DVD 


S 1.00 


S 10.00 


s 


1.00 


S 10.00 


S 1.00 


S 10.00 ! 


S 1.00 


S 5.00 


s - 


s - 


s - 


s - 


Supplemental Materials/Booklets 


S 0.25 I $ 3.00 | S 


- IS - 


s - Is - | is - 


s - 


s - 


s - 


S - !-S - 


Sheet Music 


Varies 


Varies 


$ 


- IS - 


s - 


s • 




S 0.10 


S 5.00 


s - 


s - 


s - 


s - 


Orchestral Material/Music Sets 


S 0.25 ! S 10.00 


3 


■ is - 


S - IS - I j S 0.25 1 S 10.00 


s • 


s - 


S - IS - 


Vertical File Materials 


$ 0.10 IS 5.00 | S 


- IS - 


S - | S - I | S 0.10 1 S 5.00 


s - 


s - 


S - IS - I 



FEES 


Per Day j Max | Per Day 


Max 


Per Day 


Max 




Per Day 


Max j Per Day 


Max 


Per Day 


Max 




Library Card Replacement 


Vl~ 


S 2.00 |%5 --■ 


S 0.50 


Wi 


S 0.50 




- 81 


s 1.00 teasS? 


S 0.50 


_-T : -^ : 


S 0.50 




Visitors Card (Non-California Resident) 




S 20.00 




S 20.00 




S 20.00 




-M 


S 10.00 




S 10.00 




S 10.00 




Processing fee (lost catalogued material) 


~--7Zj^r 


S 5.00 




S 5.00 h^dggg 


S 5.00 | 


...--- -"■•:. 


S 5.00 


"->-.:-/. 


S 5.00 


7:,---i 


S 5.00 




Processing fee (lost uncatalogued material) \OM¥~: 


S 2.00 k-~ --I S 2.00 fjjgjgaa 


S 2.00 I 


-:'.-;i"': 


s - 


r jM.':t 


S ■ I 




Books by Mail 




s - 


■■: ; % 


s - 


;->;:-.-" 


S • I 


~S^S 


S 3.00 


y-- : 


S 3.C0 


: :- 


S 3.00 




Interlibrary Loan (ILL) 


- 


S 0.50 


i-Sz-: 


S 0.50 


J.Ii}-.- 


S 0.50 ! 


:'■ % 


s - 




s - 




s ■ 




Reserve Fee 




S 0.50 


\ 


S 0.50 \i'.^£- 


S 0.50 j 


'^W 


s - 


: >f- : 


s • 




s • 




Returned Check Fee | perChk. 


S 10.00 I - " IS 10.00 1 V~v : 


N/A I | perChk. 


s 10.00 1 :- 


S 10.00 


' 


N/A 




Recovery of Delinquent Accounts 


s • 1 -.- : - : 


r 

i m 


i I perAcct 


S 10.00 


- 




I 






Interlibrary Loan (ILL) Photocopy Fee | per page 


S 0.15;perpage 


S 0.15 | per page 


S 0.15 ' I per page 


S 0.25 


per page 


S 0.25 t per page 


S 0.25 


SF History Center Photocopy Fee I per photc 


S 1.00 i per photc S 1.00 ! per photc 


S 1.00 : I per photc 


S 1.00 


per photc 


S 1.00 | per photc 


S 1.00 


SF History Center Reproduction Fee 


S 15.00 i_„ |S 15.00 !-:--/- 


S 15.00 | | 


S 15.00 


- 


S 15.00 I ------,?, 


S 15.00 


Barcode Label 


Ec£ : 1 


S 0.25 I |S 0.25 I- 


S 0.25 : 


S 0.25 




S 0.25 I 


S 0.25 


Damaged Barcode & Flyleaf 




S - 


IS - !-■ 


i ■ ■ \ 


S 1.00 


- - 


5 1.00 [ .. 


S 1.00 


I Crayoning a single page 


S 0.25 




S 0.25 


% 0.25 ' I : ' 


s • 


% 


S - 




s - 




| Damaged Date Due Slip 




S 0.10 




$ 0.10 i . ' •": 


i i : -- 
s o.io ; I s*5l 


s - 




s - 


- 


s • 


I 

1 
1 

1 


| Damaged Mylar Book Cover 


S 0.25 I 


S 0.25 | 


S 0.25 ' 


s - 




s - 


" 


s - 


i 

| Damaged Plastic PD Sleeve 




S 1.00 


!' 


S 1.00 


| - i 

I 

I . - 


S 1.00 




1 


Is • 


. 


s - 




s - 



Source: SF Public Library 



12f'.9«J8'. 



LIBRARY FINES FEES 



Attachment I 
Page 2 of 2 





■:--■: CURRENTS .-_■■.:■•■ 

ADULT TEENS JUVENILES 




PROPOSED 
ADULT TEENS JUVENILES 


REPLACEMENT COSTS 


Per Item | Max Per Item | Max | Per Item Max | Per Item | Max | Per llern) Max |per!tem| Max 


Hardback Non-fiction 


S 25.00 | $ 30.00 


S 25.00 I S 30.00 I S 12.00 I S 17.00 I I S 35.00 I $ 40.00 | S 35.00 


S 40.00 I S 20.00 | S 25.00 


Hardback Fiction 


$ 18.00 | $ 23.00 


S 18.00 I S 23.00 I S 12.00 I S 18.00 i I S 25.00 S 30.00 | $ 25.00 


S 30.00 


S 15.00 


S 20.00 


Paperback Catalogued Non-fiction 


S - $ 15.00 | $ - | $ 15.00 IS - | $ 10.00 1 | S 20.00 I $ 25.00 ! $ 20.00 | S 25.00 


S 10.00 


S 15.00 


Paperback Catalogued Fiction 


J - 


$ 5.00 I S - I $ 5.00 I $ - | S 5.00 I | $ 10.00 


S 15.00 


S 10.00 


S 15.00 


S 5.00 | S 10.00 


Paperback Uncatalogued 


S 5.00 


S • |S 5.00 IS - l$ 5.00 IS • ! IS 5.00 


S - 


S 5.00 


s • 


S 5.00 | S • 


PB/HB International Generic Record 


S 5.00 1 $ 10.00 IS 5.00 I S 10.00 I S 5.00 I $ 10.00 I I $ 5.0C | J 15.00 


S 5.00 


S 15.00 


S 5.00 I S 15.00 


Periodicals/Magazines 


S 3.00 I $ - | S 3.00 I S - | S 3.00 | S • | I S 5.00 | S - 


S 5.00 


s - 


S 5.00 IS ■ 


Phonorecords 


S 9.00 |S - | S 9.00 


S - I S 9.00 I S - I |$ 15.00 I S 20.00 


S 15.00 


S 20.00 


S 15.00 


S 20.00 


Audio Cassettes 


S 11.00 js - IS 11.00 


S - I S 11.00 I S - I I S 10.00 I s - 


S 10.00 


s - 


S 10.00 


s - 


Videos 


VARIES I VARIES I VARIES I VARIES I VARIES I VARIES I I S 20.00 I S 25.00 


S 20.00 


S 25.00 


S 20.00 


s 29 :: 


Digital Video Disc (DVD) 


S - I S - I S - I S - I S - | S - | | S 20.00 1 S 25.00 


S 20.00 


S 2500 I S 20.00 


S 25.00 


Audio Books 


$ 5.00 I per tape JS 5.00 I per tape ! $ 5.00 J per tape ' IS 5.00 


per tape 


S 5.00 


per tape '. S 5.00 


per tape 


Sheet Music Scores 


I SET BY ART DEPARTMENT I 


SET BY ART DEPARTMENT 






Sheet Music (Uncatalogued) 


I SET BY ART DEPARTMENT 




•mat 






SET BY ART DEPARTMENT 






Compact Discs 


VARIES I I VARIES 


VARIES 






S I5J0C 


12000 


S 15.00 I S 20.00 


S 3.00 
S 15.00 


■ '■ -■ 1 — 1 

S 20.00 1 


Language Sets 


S 10.00 I 


S 10.00 | : 


S 10.00 1 3 


1 S 10.00 




s 10.00 Ke$p# 


s •: x 


Vertical File/Picture File 


S Z00|:<-1 


S 2.00 


£ - — 


S Z0OK 


> S 5.00 




S 5.00 


S 5.00 


-:-•-. 


Lost Audio Cassette Case 


S 1.00 




S 1.00 




S 1.00 I- 


IS 1.00 If 


S 1.00 R! 


S 1.00 




Lost Videocassette Case 


S 3.00 


- 


S 3.00 




S 3.00 t r 


IS zoo 


■ 


S 2.00 I ; .- .-/.-■■- 


s ZOO 




Lost CD Jewel Case 


s - 


- 


s - 




s - 1 


l$ 1.00 




S 1.00 {— < 


S 1.00 |.ti 



Source: SF Public Library 



i»tf»/oo 



LIBRARY FINES FEES 



Attachment II 
Paee 1 ot 2 







jS5K%fr£- - rCH£NG&-^ _ - ------- i EXPLANATION QF CHANGE 

ADULT TEENS JUVENILES 


FINES 


| Per Day | Max | Per Day | Max | Per Day | Max | 


Books 




$ - .IS - IS - IS - IS - IS - I 


Phonorecords 




s - Is - IS - |S - Is - 


5 - | 


Audio Cassettes 


~Ts - Is - is - Is - is - 


$ - I 


Books on Tape 


is - Is - Is - IS - is - 


s - I 


Compact Discs 


I S (0.40) $ (5.00)1 $ - 1 $ - $ - 


JDaRy and maximum fines reduced so that they wiB be consistent with other daily 
$ - |and maximum fines. 


Magazines 


fS - I VARIES i$ - |S - |S - 


S - iMaximum fine changed so that it win he consistent with other maximum fines. 


Paperback (Catalogued) 


Is - Is - Is - is - 


s - 


$ . | 


Paperback (Uncatalogued) 




s - 


S 1.50 


s - 


s - 


s - 


[Maximum fine increased as an incentive for patrons to return material in a timely 
$ • |manner. Current maximum of SO. SO is not sufficient 


Art Prints 


I S (1.00)1 S(10.00)i $ - I $ - 


S |S | Don'l have art prints In circulation anymore. 


Video & DVD 




s - 


S (5.00)1 S (1.00)| S (10.00) 


lAdult maximum line reduced lo make it consistent with other maximum fines. Fees 
[eliminated for children and teens consistent with policy not to charge late fees to 
$ (1.00) $ (10.00) jthis group of users. 


Supplemental Materials/Booklets 




S (0.25)i S (3.00)1 $ - 1 S - 


S - |S litems arem catalogued and are not tracked. Fines not generally assessed. 


Sheet Music 




VARIES 


VARIES I S - 


s - 


$ - 


lOaflY and maximum fines changed so that they would be consistent with other daly 
$ - jand maximum fines. 


Orchestral Material/Music Sets 


is - Is - Is - Is - 


s - 


$ - i 


Vertical Hie Materials 


Is - Is • is - IS - is - 


s - I 



FEES 




Per Day 


Max j Per Day 


Max 


Per Day 


EXPLANATION OF CHANGE 


Library Card Replacement 




■ £vi;= 


S (1.00)! ffi 


5 - 


•~i:j}r- 


[purchasing a debit card lor S1.00 and registering it as a library card. Registration is 
free. The Library will continue to charge $1.00 to patrons who do not want to buy a 
S • Ideal card. 


Visitors Card (Non-California Resident) 




,_" vfprfe 


S (10.00) 


. .-■"; 


S (10.00) 


S?4ir4. 


jCurrent (ee includes J 1 refundable deposit after 3 months. Oeposil was imposed 
to ensure return of materials. Currently, most non-State cards are issued for 
$ (10.00) [internet access and not for books. Consequenby, the deposit is not required. 


Processing fee (lost catalogued material) 




--.,-': ;.F.~ 


s - I - 


s - 


.- :.-_; ;-.-.. 


s - I 


Processing fee (lost uncatalogued material) 




v ^:: : -: 


S (2.00)! t- 


S (2.00)h-- 


S (2.00) [coded. 


Boofcs by Mail 




; "'.'f^y' 


S 3.00 


--■' 


S 3.00 


-yW-: 


INew fee. Covers cost of shipping and handling of books that are mailed to patrons. 
S 3.00 'Actual amount charge will be S3 or the actual cost of shipping and handling. 


Interlibrary Loan (ILL) 




;':'■;■'-.- 


S (0.50) 


-' . 


S (0.50) 


•'■■ 


[Fee eliminated to enhance the use of the collection and to improve public service. 
S (0.50), Fees deter patrons from access to collection. Very minimal impact on revenue. 


Reserve Fee 






S (0.50) 




S (0.50) 


■ 


iFees deter patrons from access to collection. Very minimal impact on revenue. 
jMost reserves are made via email/computer eliminating the cost of post card and 
S (0.50)!postage. 


Returned Check Fee 


\-y-:-^r 


$ - I 


s - 


'- .- 


N/A I 


j Recovery of Delinquent Accounts 


per AccL 


s 10.00! . ■■- 


s - 




,New fee. Library has contracted with a collection service lo pursue materials that | 
S - iare 90 days late and valued over 550. 


i Interlibrary Loan (ILL) Photocopy Fee I per page 


S 0.10 i per page 


S 0.10 I per page 


S 0.10 Increased to reflect cost of copying. 


I SF History Center Photocopy Fee I I per photc 


S - I per photd S - I per photc 


$ - 


i SF History Center Reproduction Fee I | -• • ■ ■..- 


S - I 


S - |-js 


$ - i 


Barcode Label 


$ - I 


S - I",' ■ 


S - I i 


Damaged Barcode & Flyleaf I | -'-■-:-- 


s 1.00 i 


s 1.00 1 


$ 1.00 labor intensive process if bar code is damaged. 


i Crayoning a single paqe | l~-'i- ':> 


S (0.25}| 


S (0.25) 




: Fee eliminated as it is difficult or impossible lo determine whether damage was a | 
$ (0.25) pre-exJsbng condition. Administratively unenforceable. 


i Damaged Date Due Slip 


S (0.10)1 ■" 


S (0.10)1 


[Fee eliminated as it is difficult or impossible to determine whether damage was a I 
S (0.10) pre-existing condition. Administratively unenforceable. 


I Damaged Mylar Book Cover 






S (0.25)1 


S (0.25)1 " 


■Fee eliminated as it is difficult or impossible to determine whether damage was a I 

$ (0 25)'pre-exi50ng condition. Administratively unenforceable. 


I {"'•■•■•-" 
I Damaged Plastic PD Sleeve I - 


S (1.00)! 


S (1.00)| 


;Fee eliminated as It is difficult or impossible to determine whether damage was a 
$ (1.00) pre-existing condition. Administratively unenforceable. 


-ME0000a.xls 


Source: SF Public Library 



"iiy&rao 



LIBRARY FINES FEES 



CHANGE 



TEENS JUVENILES 



Attachnent II 
Pa<*e 2 of 2 



EXPLANATION OF CHANGE 



REPLACEMENT COSTS 




Per Item 


Max 


Per ltem| Max 


Per Item 


Max 


EXPLANATION OF CHANGE 


Hardback Non-fiction 


Hardback Fiction 


I S 7.00 1 $ 7.00 | $ 7.00 1 $ 7.00 1 J 3.00 1 $ 100 1 


Paperback Catalogued Non-fiction 




$ 20.00 1 $ 10.00 I $ 20.00 i J 10.00 | $ 10.00 | $ 5.00 




Paperback Catalogued Fiction 




$ 10.00 I $ 10.00 i $ 10.00 j % 10.00 I $ 5.00 


$ 5.00 




Paperback Uncatalogued 


1$ 


$ - 




PB/HB International Generic Record 




S - |$ 5.00 IS - 1 5 5.00 1 $ ■ 


$ 5.00 ; Revised amounts reflect current replacement costs for various materials. 


Periodicals/Magazines 




S 2.00 1$ - I $ 2.00 1 5 - 


$ 2.00 I $ - |These amounts are used only when materials cannol be located or found 


Phonorecords 




$ 6.00j$ 20.00 1$ 6.00 1 $20.00 


$ 6.00 | $ 20.00 I through a bibfographic services such as Amazon.Com or Bowken Annual 


Audio Cassettes 




$ (1.00)1 $ - I $ (1.00)| $ - 


$ (1 .00) | $ - | Estimated that less than 5% of materials cannot be located through these 


Videos 


| VARIES 1 VARIES 1 VARIES 1 VARIES I VARIES 1 VARIES Isources. The Library will assess fair markel value for lost item* based on 


Diqital Video Disc (DVD) 




$ 20.00 1 $ 25.00 i $ 20.00 ! $ 25.00 1 $ 20.00 1 $ 25.00 


quotes from bibliographic sources. Replacement chanjes are in addition to 


Audio Books 




$ - 


N/A | $ - I N/A I $ - I N/A 


processing fees. 


Sheet Music Scores 






| NO CHANGE 




Sheet Music (Uncatalogued) 






I NO CHANGE 






Sup. Materials (I.e., booklets, maps, etc.) 




$ - 


. Is - I - ■•-.!$ - 






Compact Discs 




VARIES 


$ 20.00 I VARIES I $ 20.00 I VARIES 


$ 20.00 |New fee. OVOs a growing part of the Library's circulation. 


Language Sets 




S - 




$ - I 


$ - 


.•;';•:• 




Vertical File/Picture File 




$ 3.00 


■'■--"-- - 


$ 3.00 | * 


$ 3.00 


w- - - 




Lost Audio Cassette Case 




$ - 




$ - I 


$ - 


:-:~ 




Lost Videocassette Case 




$ (1.00) 


- 


$ (1.00)1 -. 


$ (1.00) 


• 




Lost CD Jewel Case 




$ 1.00 




$ 1.00 | -' 


$ 1.00 


1 





Source: SF Public Library 



2/20/01 



Attachment III 



DEPARTMENTAL REVENUE 
Public Library 



ACTUAL PROJECTED 

FY 1999-2000 ANNUAL REVENUE 



Books Paid 


$ 


43,261 


$ 


41,548 


Fines & Fees 


$ 


418,819 


$ 


479,512 


Reserves 


$ 


14,814 


$ 


- 


ILL Fee 


$ 


3,691 


$ 


- 



480,585 $ 



521,060 



FY 1999-00 per FAMIS. 

No decreases in departmental revenues are expected as a result of the proposed 

fine and fee schedule. 



Attachment IV 
a ', , ' Page 1 of 2 

' . : V . SUPPLEMENTAL MATERIAL 

FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION 

December 19,2000 



FINES & FEES 

How were fines & fees determined? What process did the library qo through to 
determine the new fee schedule? 

The revision of the fines and fees schedule has been under consideration by the Library 
for more than seven years (since 1994). The key factors considered in this review 
were customer-friendly policies and policies that best protected the Library's collection. 
Fines and fees schedules for other public libraries in the Bay Area were surveyed to 
determine regional benchmarks and best practices in this area. The impact of newer 
formats, services and technologies also was a determining factor in revising the fines 
and fees schedule. For example, the implementation of a vendor-supplied debit card - 
which provides library cards with $1 .00 photocopy value for the price of $1 .00 - was 
inconsistent with the standard library charge of $2 for a replacement library card. Other 
new services include the implementation of a collection recovery program aimed at 
protecting the collection (see below for details) and a books-by-mail service for 
customer convenience. 

The fines & fees schedule was determined after many meetings of the public services 
staff and review and approval by the Library Commission at several public meetings. 
The proposed schedule reflects modern techniques of pricing materials and includes 
new media formats (DVD). One of the most important changes for customer service is 
the elimination of the $.50 charge for reserves for materials owned by the Library and 
materials borrowed from other libraries. Elimination of this charge makes the entire 
collection available for anyone's use, no matter which branch they choose to visit. The 
proposed fines and fees schedule was devised to serve as an incentive plan to return 
materials in a timely manner. 

What is the relationship between the fines assessed and the cost to the library? 

Fines for overdue materials act as an abatement to the cost of sending out notices that 
remind people to return their materials. The cost of replacement of lost materials has 
been modified to reflect that the most up-to-date information sources will be checked to 
determine that cost. If that information is not available, then a default "standard price" of 
materials will be used, which is based on current average pricing for materials. The 
application of a consistent "processing fee" attempts to recover a portion of the library's 
investment in the average cost of cataloging and processing materials. If there is no 
processing or cataloging (i.e. paperback books), we are recommending that the 
processing fee not be applied. 

The Library's Mission Statement states "The Library is dedicated to free and equal 
access to information...." To effect this mission, the public and the staff believe that it is 
in the best interest of the library to make all of its materials accessible via reserves to all 
patrons for free. Similarly, since we are not charged for the interlibrary loan of books 
from other libraries, the staff and public believes the Library should not charge 
customers for access to the materials of other libraries. 



Source: SF Public Library 
10 



Attachment IV 
Page 2 o.t 2 

SUPPLEMENTAL MATERIAL 
FINES & FEES ORDINANCE AND FORTUNIO RESOLUTION 

December 19, 2000 



How will the collection program work? Who gets referred and what criteria will be 
used? 

Customers who have not returned materials worth more than $50.00 that are more than 
45 days overdue will be electronically sent to the Collection Agency by the Library's 
automated system. Currently, library customers receive only one notice when material is 
overdue. With the Collections process, the Library will implement a second overdue 
notice to alert customers that not returning materials may result in the referral of their 
account to a collection agency. We have a written agreement with the Tax Collector to 
assume this collection duty through a third party library vendor. We believe that lowered 
fines and fees combined with a collection agency program will stimulate both the use 
and the return of library items. 



Source: SF Fublic Library 
11 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Item 2 -File 01-0105 



Department: 
Item: 



Public Works 

Ordinance amending the Administrative Code by adding 
Section 8.40 to authorize the Department of Public Works 
to charge license fees for the use of the City's Base Map 
Geographic Information System ("GIS") data and 
ratifying the establishment of existing and new license 
fees. 



Description: 



The proposed ordinance amends Chapter 8 of the 
Administrative Code by adding Section 8.40, to: 



Authorize the Department of Public Works (DPW) to 
"charge license fees thereunder that are consistent 
with the fair market value of the GIS," and to 
establish reduced rates for non-profit organizations as 
determined by the Director of DPW. The proposed 
ordinance does not identify the specific fee levels. 
Authorize the appropriation of the fees to the DPW for 
maintenance of the Base Map GIS data. 
Ratify existing license fees. 



The proposed ordinance provides authority for the 
Director of DPW to establish license fees at fair market 
value for the use of the City's Base Map GIS data and 
that the Director "may establish standard reduced fee 
rates for non-profit organization licensees of the GIS." 

The DPW Office of Geographical Data Services has 
developed and maintains the City's Base Map, which is 
formatted for and accessed through GIS software. The 
Base Map is comprised of all the Assessor's blocks and 
lots, the City's right of way maps, information on the 
location and dimensions of curbs and pavement, utility 
lines, land use zones, street trees, streetlights, and 
seismic hazard zones. City departments use the Base Map 
GIS data for a variety of purposes, including facilitating 
the street construction permitting process, managing the 
sewer and water main system, and assessing earthquake 
risk. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

12 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



According to Mr. Douglas Legg of the DPW, DPW would 
charge license fees to third parties through license 
agreements with Value Added Resellers (VARs) for the 
use of the City's Base Map GIS data. According to Mr. 
Legg, third parties include architectural and planning 
consulting firms, market research firms, cartographic 
firms, and telecommunications entities. To facilitate the 
demand by third parties for the City's Base Map GIS 
data, according to Mr. Legg, the City Attorney prepared 
license agreements between DPW and VARs. Under 
contract with the City, the VARs are authorized to sub- 
license the City's Base Map GIS data to third parties. 
According to Ms. Tina Olson of DPW, the VAR 
agreements are not subject to Board of Supervisors 
approval because under Charter Section 9.118 the VAR 
agreements that do not have anticipated revenue to the 
City of $1 million or more do not require approval by the 
Board of Supervisors. The VARs re-package the Base Map 
GIS data, and their products may include software and 
training. 

DPW began charging fees to various City departments 
and the San Francisco Redevelopment Agency in FY 
1996-97 to pay for the development and maintenance of 
the City's Base Map GIS data. Presently, DPW has work 
orders from 12 City departments, the San Francisco 
Redevelopment Agency and 5 DPW bureaus. According to 
Mr. Legg, DPW entered into license agreements with 
three VARs, namely Barclay Mapworks, ValueCad, and 
Hammon, Jensen, Wallen and Associates in October of 
1998 to market and sub-license the City's Base Map GIS 
data to third parties. According to Mr. Legg, these three 
VARs were selected based on their familiarity with the 
City's Base Map GIS data and experience with marketing 
GIS data to third parties. Under current agreements with 
the three VARs, which as previously noted are not subject 
to Board of Supervisors approval, DPW receives on a 
quarterly basis (1) 50 percent of the gross revenue 
collected by the three VARs from sub-licensing the City's 
Base Map GIS data to third parties, up to the fair market 
value (listed price) of the data product, which is currently 
$25,000 as established by the Director of DPW, and (2) 10 
percent of gross revenue from products developed from 
the Base Map by the VARs. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

13 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

According to Mr. Legg, DPW's future share of the annual 
revenue collected by the VAEs from sub-licensing the 
City's Base Map GIS data to third parties is expected to 
total $65,000. However, DPW has only collected $38,676 
from October of 1998 through February 22, 2001. Mr. 
Legg reports that the Department anticipates entering 
into new licensing agreements in September of 2001 with 
VAEs upon the expiration of the existing agreements, and 
that DPW estimates annual revenues of $65,000 
beginning in FY 2001-02, or $45,000 more than the 
estimated revenue anticipated to be realized in FY 2000- 
01 of $20,000. 

As shown in the Attachment provided by DPW, the cost of 
maintaining the City's Base Map GIS data is estimated at 
$538,676 for FY 2001-02, and would be covered by the 

: Zl f oll owing estimated funding sources: ( 1) $400 ,000 in 

revenue from the budgeted work orders for the City's Base 
Map GIS data provided by the 12 City departments, the 
San Francisco Redevelopment Agency and 5 DPW 
bureaus which participate, (2) $65,000 in revenue from 
sub-licensing through VARs the City's Base Map GIS data 
to third parties, (3) $38,676 in revenue collected since 
October of 1998 from sub-license fees for use by third 
parties of the City's Base Map GIS data, and (4) $35,000 
in consulting fees charged by DPW to provide technical 
assistance to other City departments. According to Mr. 
Legg, the $38,676 has never been allocated to DPW. 
Therefore, the appropriation of the $38,676 in fees 
previously collected would be appropriated to the DPW 
under this ordinance. 

Comments: 1. As noted in the Attachment provided by DPW, DPW 

currently has work orders from 12 City departments, the 
San Francisco Redevelopment Agency and 5 DPW 
bureaus for the Base Map GIS data. According to DPW, 
the work order revenues from the agencies are estimated 
to total $400,000 annually. 

2. Mr. Legg states that in September of 2001, when the 
existing VAR license agreements expire, DPW may enter 
into an exclusive agreement with one VAR selected 
through a competitive bidding process. That agreement 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

14 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



would not be subject to approval by the Board of 
Supervisors. 

3. According to Ms. Adine Varah of the City Attorney's 
Office, although Charter Section 2.109 provides that the 
Board of Supervisors must approve by ordinance any rate, 
fee, or similar charge to be imposed by any City 
department, the City Attorney's Office has concluded that 
Section 2.109 does not apply to the DPW GIS Base Map 
data license fees because the DPW, when negotiating and 
charging such intellectual property license fees, is 
representing the City in its proprietary capacity. Such 
intellectual property license fees are thus distinguishable 
from fees charged for public facilities or services that are 
generally offered to the community. According to Ms. 
Varah, therefore, approval of this ordinance would ratify 
the existing license fees and authorize the Director of 
JQP-W__to_establish_ne w_hcense ~fe es_without_ subseqi 



approval by the Board of Supervisors of the specific fees 
which are established by DPW. 

Currently there is no section in the City's Administrative 
Code establishing the existing DPW license fees to be 
charged for the use of City's Base Map GIS data. Ms. 
Varah states that the proposed ordinance would authorize 
the DPW to enter into licensing agreements with VARs 
that would sub-license third party use of this Base Map 
GIS data and charge license fees thereunder for the use of 
the City's Base Map GIS data. In addition, the proposed 
ordinance would ratify all existing fees charged by the 
City under GIS data license agreements since July 1, 
1998, the start date of the fiscal year in which the City 
began licensing the Base Map GIS data. 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

15 



.City and County of San Francisco 





Willie Lewis Brown, Jr., Mayor 
Edwin M. Lee, Director 



Attachment 

gage 1 of 2 (415) 554_ 4830 

FAX (415) 554-7800 
http://www.sfdpw.com 

Department of Public Works 

Finance and Budget Division 

Financial Management and Administration 

City Hall, Room 348 

1 Dr. Carlton B. Goodlett Place 

San Francisco, CA 94102-4645 



Memorandum 



February 22, 2001 

To: Anna Weinstein 

Board of Supervisor's Budget Analyst's Office 

From: Douglas Legg 

Division of Finance and Budget 



Re: Proposed GIS Fee Ordinance 

This memo is in response to questions you have asked regarding the Department of Public Works 
proposed GIS fee ordinance and appropriation. 



1. 



How did we arrive at our annual revenue estimate? 



2. 



The estimate is based on revenues collected by the Counties of Santa Clara and Los 
Angeles and reduced in proportion to San Francisco's relative size. The estimates 
were verified through discussions with potential Value Added Resellers (VARs). 

What is the budget for the Office of Geographic Data Systems? How will DPW 
address a revenue shortfall if proposed fees revenues are not realized as planned? 



Expenses 




Salaries 


$233,727 


Fringe Benefits 


51,420 


Overhead 


78,321 


Non Labor 


26,532 


Ortho Photos 


148.676 


Total 


$538,676 


Revenues 




Work Orders 


$400,000 


License Fees 


65,000 


Fee Balance 


38,676 


Consulting 


35.000 


Total 


$538,676 



The work orders are as follows: 

"IMPROVING THE QUALITY OF LIFE IN SAN FRANCISCO" We are dedicated individuals committed to teamwork, customer 
service and continuous improvement in partnership with the community. 







Attachment 






Page 2 of 2 


Assessor/Recorder 


$20,000 




City Planning 


20,000 




DBI 


46,000 




DPH 


20,000 




DPT 


20,000 




DPW-Bureau of Construction Mgmt. 


35,000 




DPW-Bureau of Architecture 


20,000 




DPW-Bureau of Engineering 


20,000 




DPW-Bur. Street Environmental Srvs 


20,000 




DPW-Bur. Street & Sewer Repair 


20,000 




DTIS 


20,000 




Fire Department 


20,000 




Mayor's OES 


19,000 




PUC-Bureau of Light, Heat & Power 


20,000 




PUC-Clean Water 


20,000 




Real Estate 


20,000 




SFRA 


20,000 




Treasurer/Tax Coll. 


20.000 




Total 


S400,000 





DPW plans to update the Ortho Photograph layer of the Basemap in the current fiscal 
year. Ortho photographs were last updated in 1993 and the Department and subscriber 
departments are anxious to for this more accurate and timely data. Should revenues not be 
realized in the current fiscal year, expenditure of some non-labor budget items or 
purchase of ortho photographs would be delayed until next fiscal year. 

3. What is a Value Added Reseller (VAR)? Why is DPW "licensing" VARs to sell the 
Basemap data? 

A VAR is essentially a broker who markets data or software to interested buyers. City 
staff are not trained at marketing or managing contracts to sell data, so we use these 
brokers. The City owns the Basemap data, and licenses the VARs to sell it. The VARs in 
turn sub-license the data to interested buyers. Under DPW's license agreements with the 
VARs, DPW is entitled to a percentage of these receipts. Amongst others, the VARs have 
sub-licensed the City's Basemap to e-commerce map companies, and technology 
companies that integrate mapping data with cell phone and pager technology. 

4. How did DPW decide which VARs to license to sell Basemap data? How will DPW 
determine which vendors will be licensed in the future? 

The staff person who worked with the City Attorney to develop the license agreements is 
no longer with the City. The best information that we have indicates that DPW chose the 
current VARs based on their experience with similar municipal organizations and 
datasets, as well as their familiarity with the City of San Francisco's Basemap data. 

For any new agreement or re-licensing of the Basemap GIS data, DPW will aggressively 
seek the best terms possible through competitive negotiations with qualified data 
marketing firms. 



17 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Item 3 -File 01-0252 



Department: 
Item: 

Amount: 
Source of Funds: 
Description: 



Public Utilities Commission (PUC) 
Water Department 

Hearing to consider the release of reserved funds for the 
Water Department in the amount of $474,765 to fund 
overtime expenditures. 

$474,765 

Water Department's FY 2000-2001 Budget 

The Water Department's FY 2000-2001 budget includes 
budgeted overtime expenditures of $1,424,297. During the 
FY 2000-01 budget hearings, the Finance and Labor 
Committee recommended that one third of annual 
Overtime expenditure budgets for several City 
departments be placed on reserve so that the Committee 
can monitor spending for Overtime during the fiscal year. 
Therefore, the Finance and Labor Committee placed a 
total of $474,765 of this amount on reserve for the Water 
Department, leaving $949,532 available for expenditure. 

The table below provides a summary of Overtime 
spending to date and projected overtime spending for FY 
2000-2001, as well as spending to date and projections for 
all Water Department Salary and Fringe Benefit 
accounts, including Overtime, based on the Controller's 
payroll records. 



Controller's Projection -Water Department Expenditures for Overtime and Total 
Salaries and Fringe Benefits Including Overtime through February 2, 2001 



FY 2000-2001 
Budget 



Actual 
Expenditures 
Through Pay 
Period Ending 

2/2/01 



Projected 
Expenditures Projected Surplus 
Through July 30, (Deficit) 

2001 * 



Overtime 

All Salaries and Fringe 
Benefits Including 
Overtime 



$1,424,297 
35,540,372 



$1,104,831 
20,985,905 



$2,039,406 
35,556,203 



($615,109) 
($15,831) 



Projections based on spending at the level of the pay period ending 
2/2/01 for the remainder of the Fiscal Year. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



As summarized in the table above, the Controller's latest 
projection report for salary and fringe benefit expenditures 
(including Overtime) shows that: 

• As of the pay period ending February 2, 2001, the Water 
Department has incurred Overtime expenditures of 
$1,104,831. 

• Through February 2, 2001 (or 15.5 of 26.0 pay periods in 
FY 2000-01) the Water Department has already 
expended 77.6 percent of its total Overtime 
appropriation of $1,424,297 and 116.4 percent of its 
available, unreserved overtime funding of $949,532. 

• Based on overtime expenditures incurred during the pay 
period ending February 2, 2001, the Controller's 
projection indicates that the Water Department will 
spend a total of $2,039,406 on overtime, which is 
$615,109, or 43.2 percent, more than the Department's 
total FY 2000-01 Overtime appropriation of $1,424,297. 

• For all Salaries and Fringe Benefit Expenditures, 
including overtime, the Controller's projection indicates 
that the Water Department will incur total expenditures 
of $35,556,203 in FY 2000-2001, which is $15,831, or 
0.04 percent, more than the FY 2000-2001 budget 
amount of $35,540,372. 

Based on the data summarized above, the Water 
Department is currently projected to end Fiscal Year 2000- 
2001 with a deficit of approximately $615,109 in Overtime 
expenditures. However, Mr. Carlos Jacobo of the PUC 
advises that the Water Department does not anticipate 
requesting a supplemental appropriation for Overtime 
expenditures in FY 2000-2001 for the following reasons: 

• Mr. Jacobo reports that the Water Department is 
currently conducting an internal audit of its Overtime 
practices and has detected a variety of accounting errors 
in the department's recording of Overtime and that 
some charges for Overtime worked on capital projects 
were mistakenly applied to the Water Department's 
operating budget instead of the specific capital 
improvement projects. According to Mr. Jacobo, as part 
of the audit the Water Department is reviewing all 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

19 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Overtime expenditures for Fiscal Year 2000-2001, and 
upon completion, the department will reverse incorrect 
Overtime charges in order to revise its Overtime 
expenditures applied to the operating budget. As of the 
writing of this report, Mr. Jacobo estimates that such 
revisions will result in a reduction of current Overtime 
expenditures as of February 2, 2001 of $1,104,831 by 
approximately 10 percent to 20 percent or between 
$110,483 and $220,966. 

• In addition, Mr. Jacobo advises that the Water 
Department is putting into place new procedures and 
controls to monitor and restrict the use of overtime. 
According to Mr. Jacobo, such procedures and 
restrictions will allow the department to reduce 
Overtime expenditures for the remainder of Fiscal Year 
2000-2001. As a result, the Water Department expects 
to end Fiscal Year 2000-2001 without a deficit in 
overtime expenditures. 

• Further, Mr. Jacobo advises that Overtime expenditures 
for the first seven months of Fiscal Year 2000-2001 (July 
through January) have been higher than anticipated 
due to an unusually high number of emergency repairs 
to ruptured water pipelines. Mr. Jacobo anticipates that 
the number of such repairs should decline over the 
remainder of Fiscal Year 2000-2001. 

• According to Mr. Jacobo, should the Water Department 
end Fiscal Year 2001-2002 with a deficit in Overtime 
spending, the Water Department would fund such an 
Overtime deficit with surplus funds from other accounts 
in the department. Therefore, Mr. Jacobo anticipates 
that the Water Department will not be required to 
request a supplemental appropriation for Salaries and 
Fringe Benefits including Overtime. 

Recommendation: Approve the requested release of $474,765 in reserved 
Overtime funds. 



BOARD OF SUPERVISORS 

BUDGET ANALYST 

20 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Item 4 - File 01-0208 



Department: 
Item: 

Amount: 
Source of Funds: 



Description: 



Public Utilities Commission (PUC) 

Hetch Hetchy Water and Power (Hetcb Hetchy) 

Ordinance appropriating $25,400,000 of Hetch Hetchy 
Operating Fund monies to fund the purchase of electrical 
power for resale to meet municipal and contractual 
obligations for Fiscal Year 2000-2001. 

$25,400,000 

Hetch Hetchy operating funds have been identified for the 
proposed supplemental appropriation from the following 
specific sources: 



Source 


Amount 


Revenue from Sale of Electricity 


$10,800,000 


De-obligated Capital Projects 


7,400,000 


Unappropriated Fund Balance 


6,200,000 


Permanent Salary Savings 


1,000,000 


Total 


=; $25;4oo,oqo 



See Comment No. 2 below for further discussion of 
funding sources. 

As a byproduct of delivering water to the City's Water 
Department for sale to the City's retail customers in San 
Francisco and wholesale water customers in the Bay 
Area, Hetch Hetchy Water and Power also generates 
hyrdroelectric power for the City's municipal purposes 
and for sale to customers who purchase hydroelectric 
power under contracts with the City. 

The proposed supplemental appropriation would provide 
a total of $25,400,000 to Hetch Hetchy to fund the 
purchase of electrical power for resale. 1 Hetch Hetchy has 
historically purchased wholesale power on the spot 
market for electricity to supplement its own generation of 
hydroelectric power to meet municipal and contractual 



1 Ms. Park advises that "power for resale" includes power Hetch Hetchy purchases to supply 
electricity to all of Hetch Hetchy's customers, including City departments and tenants on City-owned 
land, as well as to other retail and wholesale customers. Such customers include the Modesto and 
Turlock Irrigation Districts. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

21 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

obligations. A shortage this year in both natural gas and 
electricity supplies, combined with California's 
deregulation of the power industry, have led to steep 
increases in the cost of purchasing such electric power. 
Ms. Laurie Park, Acting General Manager of Hetch 
Hetchy, reports that while in the past, prices in the spot 
market have ranged from $20 to $40 per Megawatt hour 2 , 
the current price for power on the spot market is 
fluctuating at around $200 to $300 per Megawatt hour. 

For FY 2000-2001, Hetch Hetchy budgeted a total of 
$17,600,000 for the purchase of power for resale. 
According to Ms. Park, as of February 19, 2001, Hetch 
Hetchy had expended a total of $36,010,488, which is 
$18,410,488, or 104.6 percent, more that the amount of 
$17,600,000 budgeted for the entire fiscal year. Based on 
projections provided by Ms. Park, Hetch Hetchy will 
expend an estimated total of $41,218,088 to purchase 
power for resale FY 2000-2001, which will be $23,618,088, 
or 134.2 percent, more than the original budgeted amount 
of $17,600,000, as shown in Attachment I, provided by 
Hetch Hetchy. However, as explained in Comment No. 5, 
Hetch Hetchy is requesting $25,400,000, or $1,781,912 
more than the projected year-end deficit of $23,618,088. 

Comments: 1. The FY 2000-2001 budget, as adopted by the Board of 

Supervisors, is based on total General Fund revenue 
sources that include a transfer of Hetch Hetchy surplus 
revenues to the General Fund in the amount of 
$29,850,000. Mr. Carlos Jacobo, Budget Director of the 
PUC, does not anticipate that the proposed supplemental 
appropriation will cause a reduction in Hetch Hetchy's FY 
2000-2001 transfer to the General Fund, as previously 
approved by the Board of Supervisors. According to Mr. 
Jacobo, Hetch Hetchy currently has an unappropiated 
fund balance totaling approximately $11,000,000, which 
would be reduced by $6,200,000 to approximately 
$4,800,000 if the proposed supplemental appropriation 
were to be approved. 



2 A Megawatt hour is equivalent to 1,000 kilowatt hours, or enough power to provide electricity to 
one thousand average homes for a period of one hour, according to Ms. Park. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

99 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



2. As shown in the table above, Hetch Hetchy will use the 
following four sources to fund the proposed $25,400,000 
supplemental appropriation: 

(a) Revenue from Electricity Sales (810,800.000) : Ms. 
Park advises that Hetch Hetchy generated this 
$10,800,000 in revenues by selling electricity beyond 
the $81,180,000 that Hetch Hetchy had anticipated 
and budgeted for FY 2000-2001, as shown in 
Attachment II. Hetch Hetchy projects year-end 
revenues of $95,278,686 from the sale of electricity, 
which is $14,098,686 more than the $81,180,000 in 
revenues budgeted for FY 2000-2001. Ms. Park 
advises that Hetch Hetchy is requesting that only 
$10,800,000 of the $14,098,686 in projected surplus 
to be used to fund the subject request since the year- 
end revenue projections may change depending on 

_nn_ra-tes— to^be^el^-b y ^the^^alifQr-m^ 



Commission. 

(b) De-obligated Capital Projects ($7.400.000) : 
According to Ms. Park, Hetch Hetchy reviewed all of 
its capital projects and determined that the proposed 
New Moccasin Penstock Project, originally planned 
to begin in the Spring of 2001, could be deferred for 
one to two years without risk to public health or 
safety, as stated in Attachment III. According to Ms. 
Park, the new Moccasin Penstock Project would 
expand the system of pipes, increasing the Moccasin 
Powerhouse's ability to generate electricity and 
allowing Hetch Hetchy to repair existing pipelines. 
Ms. Park reports that the entire $7,400,000 balance 
in the New Moccasin Penstock Project would be used 
to help fund the proposed supplemental 
appropriation. According to Ms. Park, Hetch Hetchy 
has completed the design phase of the project and 
will postpone putting the construction contract out 
to bid until Fiscal Year 2002-2003. Ms. Park advises 
that Hetch Hetchy will fund construction of the 
project with a future appropriation, subject to 
approval by the Board of Supervisors. Ms. Park 
estimates that the New Moccasin Penstock Project 
will now be rebudgeted in Fiscal Year 2002-2003 and 
completed in Fiscal Year 2003-2004. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



(c) Unappropiated Fund Balance ($6.200.000'): As stated 
in Comment No. 1 above, the proposed supplemental 
appropriation would reduce Hetch Hetchy's 
unappropriated fund balance by $6,200,000, from 
$11,000,000 to $4,800,000. 

(d) Savings in Permanent Salaries ($1.000, 000): 
According to Ms. Park, Hetch Hetchy has realized 
approximately $1,000,000 in salary savings due to 
approximately 30 vacancies during FY 2000-2001. 
Ms. Park advises that many of these vacancies result 
from Hetch Hetchy's recent reorganization and, now 
that the Department of Human Resources has 
approved a civil service reclassification study also 
related to the reorganization in the department, 
Hetch Hetchy plans to fill 12 of such vacancies 
within four to six weeks, as stated in Attachment III. 



3. As explained in Attachment III, provided by Hetch 
Hetchy, power prices are expected to remain at very high 
levels through February of 2001, declining in March 
through May (as snow packs melt and allow greater 
production of hydroelectric power) and increasing to high 
levels again during June through October of 2001. Since 
July 1, 2000, the beginning of FY 2000-2001, the average 
monthly price per Megawatt hour for power has been 
$164.04, according to Ms. Park and as shown in 
Attachment rV, provided by Hetch Hetchy. According to 
Ms. Park, Hetch Hetchy projects the average price per 
Megawatt hour for the remaining four months of the fiscal 
year (March through June) to range from an estimated 
$150 to $250 per Megawatt hour. 

4. The City is currently under long-term agreements with 
the Modesto and Turlock Irrigation Districts ("the 
Districts") for the sale of Hetch Hetchy hydroelectric 
power. These Long-Term Power Sales Agreements began 
on April 1, 1988 and will expire on June 30, 2015, for a 
term of 27 years and three months each. Under these 
Long-Term Power Sales Agreements, the City has a firm 
obligation to sell to the Districts sufficient energy to meet 
the Districts' demand for "Class 1" and "Class 3" power, 
determined by a formula defined in the agreement and 
explained in Attachment III to this report, provided by 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



Hetch Hetchy. Under these Long-Term Power Sales 
Agreements, the amount of power that the City must 
provide to the Districts is based on a 5-year irrevocable 
forecast, so that in the year 2001, the City projects the 
amount of power it will be required to provide to the 
Districts in 2005. Further, under these Long-Term Power 
Sales Agreements, the Modesto and Turlock Irrigation 
Districts have the right of first refusal for purchasing 
Hetch Hetchy's Excess Energy from hydroelectric 
generation (defined in table below). Under the Power 
Sales Agreement, the City must charge the Districts the 
following rates: 





Types of Power Sold to Modesto and Turlock 
Irrigation Districts by Hetch Hetchy. 


Current Average 

Rate per 

Megawatt Hour 

Charged to 








Districts 
in FY 2000-01 






Class 1 Power: 

Mainly used for actual municipal public purposes and 
irrigation pumping for agriculture 


$15.87 






Class 3 Power: 

Remainder of "firm" energy sold under the Agreements 


$34.10 




Excess Energv 

Excess Energy is energy that Hetch Hetchy generates 
due to the need to move water from reservoirs but does 
not need for its own use. Under the Long-Term Power 
Sales Agreements, the Modesto and Turlock Irrigation 
Districts have the first right of refusal for purchasing 
such Excess Energy from hydroelectric generation, 
according to Ms. Park 


$22.44 





In order for the City to meet the demand for power in both 
the City and in the Modesto and Turlock Irrigation 
Districts, Hetch Hetchy is required to purchase power, 
especially during summer and fall when Hetch Hetchy's 
generation of hydroelectric power is limited by the 
amount of water delivered to the City and the Bay Area. 
The Budget Analyst notes that while Hetch Hetchy has 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

25 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



paid an average of $164.04 per Megawatt hour per month 
since July 1, 2001 to purchase power, the department has 
been required by the Power Sales Agreements to continue 
selling power to the Modesto and Turlock Irrigation 
Districts at a loss. 

As shown in the table above, whenever Hetch Hetchy 
must purchase power at a current cost of $200 to $300 per 
Megawatt hour, this results in a loss to Hetch Hetchy 
ranging between approximately $184.13 and $284.13 per 
Megawatt hour when such power is sold to the Modesto 
and Turlock Irrigation Districts for Class 1 power and 
between approximately $165.90 and $265.90 per 
Megawatt hour when sold to the Districts for Class 3 
power. 

According to Ms. Park, from the period between July 1, 
2000 and December 31, 2000, Hetch Hetchy sold a total of 
471,420 Megawatt hours of electricity to the Modesto and 
Turlock Irrigation Districts, which includes: (a) 169,272 
Megawatt hours of Class 1 Power, (b) 280,268 Megawatt 
hours of Class 3 Power, and (c) 21,880 Megawatt hours in 
Excess Energy. Ms. Park advises that Hetch Hetchy 
received total revenues of $12,570,829 from the Modesto 
and Turlock Irrigation Districts for such power sales. 

Based on data provided by Hetch Hetchy, the Budget 
Analyst estimates that, for the six months from July 1, 
2000 through December 31, 2000, Hetch Hetchy 
purchased a total of 143,836 Megawatt hours for resale to 
the Modesto and Turlock Irrigation Districts at a total 
cost of $21,576,318 and an average cost of $150 per 
Megawatt hour. As a result, as of December 31, 2000, 
Hetch Hetchy has lost an estimated total of $17,711,197 
resulting from its obligation to sell hydroelectric power to 
the Modesto and Turlock Irrigation Districts. This 
estimated loss of $17,711,197 is the difference between 
the total cost of $21,576,318 to purchase power less 
approximately $3,865,120 paid to Hetch Hetchy by the 
Modesto and Turlock Irrigation Districts for such power. 

5. As stated previously, Hetch Hetchy projects that it will 
expend an estimated total of $41,218,088 to purchase 
power for resale in FY 2000-2001, which will be 

BOARD OF SUPERVISORS 
BUDGET, ANALYST 

26 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

$23,618,088, or 134.2 percent, more than the original 
budgeted amount of $17,600,000, as shown in Attachment 

1. provided by Hetch Hetchy. However, the proposed 
supplemental appropriation is for $25,400,000, or 
$1,781,912 more than the projected deficit of $23,618,088. 
Ms. Park advises that this difference of $1,781,912 will 
allow Hetch Hetchy to adjust to probable changes in the 
projected year-end deficit of $23,618,088, due to the 
volatility of electricity prices. Any unexpended portion of 
the proposed supplemental appropriation will return to 
Hetch Hetchy's Unappropriated Fund Balance at the end 
of FY 2000-2001. 

Recommendations: 1. Amend the proposed $25,400,000 supplemental 

appropriation by reserving $1,781,912, pending an 
updated projection of Hetch Hetchy's total deficit for the 

purchase of electrical power for resale in Fiscal Year 

2000-2001. T: - - : - - 

2. Request that Hetch Hetchy provide a report to the 
Finance Committee on the status of Hetch Hetchy's 
projected deficit for the purchase of electrical power for 
resale by May 1, 2001. 

3. Approve the proposed ordinance, as amended. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

97 



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«rPO 




HETCH HETCHY 

Water a Power 



WlLUE L_ BROWN, JR. 

Mayor 

president 
Victor G. Makras 
Vice President 
Ann mou-er Caen 
E. Dennis Normandy 
Frank l_ Cook 
Ashok Kumar Bhatt 

John p. Mullane, Jr. 

General manager 



Attachment III 
Page 1 of 7 




TO: 



MEMORANDUM 

Board of Supervisors Budget Analyst 
Attention: Emilie Neumann 



FROM: Hetch Hetchy Water & Power - Laurie Park 

SUBJECT: FYOO/01 Supplemental Appropriation for $25.4 Million 



DATE: 



February 19, 2001 



The purpose of this memo is to respond to questions raised by the Board of 
Supervisors Budget Analyst about Hetch Hetchy 's request for a supplemental 
appropriation in the amount of $25.4 million. 

For clarification, Hetch Hetchy requested and the SFPUC approved a request for an 
$18 million supplemental at its meeting on January 9, 2001. Subsequent to that 
date, continued dry hydrological conditions reduced Hetch Hetchy's ability to 
generate. In addition, very cool temperatures and persistent gas and electric supply 
shortages kept power prices higher than anticipated. As a result, Hetch Hetchy will 
exceed the originally requested $18 million supplemental appropriation. We believe 
that increasing the amount by an additional $7.4 million, to a total of $25.4 million, 
is reasonable at this time. However, if hydrological conditions do not rebound to 
close to "normal" levels, we may need to seek a further supplemental appropriation 
for the remainder of this fiscal year. 

"Power for Resale" Expenditures 

Object 033 "Power for Resale" was budgeted at $35,271,210 during FYOO/01. 
This amount was comprised of two principal components: $21,631,210 for "03311 
Power for Resale" and $13,640,000 for "03321 Power Transmission & 
Distribution" . 

Subobject "03311 Power for Resale" is comprised of wholesale power purchases 
(budgeted at $17.6 million) and wholesale power support costs under the long term 
City/PG&E Interconnection Agreement (budgeted at $4 million). Subobject "03321 
Power Transmission & Distribution" is comprised of charges by PG&E and others 
for transport of power. 



:, ;\^ ;,.:•. -r rx rr:: 



30 



Attachment m 
Page 2 of 7 

The spreadsheet provided as Attachment 1 to the Budget Analyst report indicates the 
breakdown of budgeted vs. actual costs by subobject and principal category of expense. 
As of February 19' , Hetch Hetchy has overspent its Power for Resale budget by 
$18,361,988. As of this date, wholesale power expenditures (including transport, aka 
"transmission and distribution") are projected at 556,687,586 through June 30, 2001. 
This is not the highest amount ever paid for wholesale power and transport services. In 
fiscal year 1986, the cost of these services totaled S58.5 million. 

Over the past 10 years, Hetch Hetchy's "Power for Resale" budget varied from a low of 
$17.7 million to a high of $39.5 million. Most of these variances were attributable to 
fluctuations in annual hydrology. The 517.7 million budget occurred in a very wet year 
(170% of "average") and the $39.5 million cost occurred during a drought (45% of 
"average"). 

This year, the very high cost of "Power for Resale" is directly attributable to the 
California power crisis and continued shortages of both natural gas and electricity. 
Attachment IV to the Budget Analyst report illustrates that over the past 7 years, Hetch 
Hetchy's annual power purchase costs ranged from a low of $3.7 million to a high of 
$15.8 million, with average prices ranging from $17.56 to $35.14 per megawatt hour. 
This year's power purchases have already exceeded $36 million at an average cost of 
$164.04/MWhr. Futures prices for March and April are fluctuating in the 5220-5250 
range. 

Districts' Contracts 

The "Long Term Power Sales Agreement between the City and County of San Francisco 
and the [Modesto/Turlock] Irrigation District(s)" were executed in 1988 and expire on 
July 1, 2015, "unless it is terminated earlier by the agreement of the Parties or by either 
Party pursuant to this Section 24 or Section 25." 

These agreements require that Hetch Hetchy provide, and the Districts take, electricity 
generated by the Hetch Hetchy Project between the "Project Dependable Capacity" 
("PDC"; presently 260 MW) as defined in these agreements and the amount of power 
needed by Hetch Hetchy to meet "City Municipal Demand". The Districts must take that 
power at a 65% load factor (i.e., Districts' Energy = Demand x Hours per Year x 65%). 

The amount of power that Hetch Hetchy must provide to the Districts is based on a 5 year 
irrevocable forecast. In other words, the City projects in the year 2001 the amount of 
City Municipal Demand expected in the year 2005. This projection is binding in terms of 
how much power the City must provide and the Districts must take in the year 2005. The 
amount of power that the City must provide and the Districts must take from the years 
2001 through 2004 have already been determined in prior years through the same 5 Ih year 
forecast methodology. The amount of City Municipal Demand forecasted for calendar 
year 2001 is 128,045 kW. Therefore, the amount of energy that the City must provide to 
the Districts is 751 million kilowatt hours [(260,000 kW- 128,045 kW) x 8760 hours per 
year x 65%]. 



31 



Attachment HI 
Page 3 of 7 



There are three classes of sales under these Agreements: 



(1) Sec. 4.15 Class 1 Power : That Power which, pursuant to Section 9(1) of the Raker 
Act, is sold at cost by City to [Modesto/Turlock]. 

(2) Sec. 4.16 Class 3 Power : That portion of Districts' Power purchased by 
[Modesto/Turlock] from City that is not Class 1 Power. 

(3) Sec. 4.22 Districts' Excess Energy : The amount of Hetch Hetchy Excess Energy, in 
kilowatthours, available for use by Districts, up to ninety-eight (98) percent of the 
greater of (1) the difference between Hetch Hetchy Excess Energy and Airport 
Tenants' energy requirements or (ii) one-half of Hetch Hetchy Excess Energy, as 
more fully described in Section 7.4. 

Class 1 and Class 3 power are considered "firm"; i.e., the City has an obligation to 
provide that amount of power under most circumstances. Exceptions are defined in Sec. 
21 "Uncontrollable Forces". Excess energy is considered "non-firm"; i.e., the City is 
only obligated to offer this energy to the Districts if and when there is sufficient water to 
generate and Hetch Hetchy generation exceeds PDC. 

The amount of power that the Districts take for Class 1 vs. Class 3 are based upon actual 
Class 1 usage. "Class 1" power may only be used by the Districts for certain purposes 
defined in the 1913 Raker Act, i.e., agricultural pumping and "actual municipal public 
purposes" [HR7207 Sec. 9(1)]. Any power taken by the Districts under the PDC is 
allocated first to qualified Class 1 uses. The balance of "firm" energy that the Districts 
must take is considered "Class 3". 

The rates at which Hetch Hetchy must sell power to the Districts is determined by the 
Agreements. In accordance with the Raker Act, "Class 1" power must be sold "at cost". 
Class 3 rates are based upon a rate methodology described in the Agreement. The rate 
methodology is tied to PG&E's "Electric System Average Energy Costs" as reported 
annually in their SEC Form 10-K reports. 

The current rates are as follows: 





Rate basis 


Class 1 


Class 3 


Excess Energy 


Demand 


S/kW-month 


S4.74 


$5.53 




Energy 


$/kilowatt hour 


$0.00588 


$0.02244 


S0.02244 


Blended (avg) 


S/kilowatt hour 


$0.01587 


$0.03410 


$0.02244 



Assuming an annual distribution of 45% Class 1 and 55% Class 3 under PDC, the 
average rate earned on firm sales to the Districts is approximately $0,026 per kilowatt 
hour ($26 per megawatt hour). 



32 



Attachment HE 
Page 4 of 7 



Total Revenues from Sales of Power 



In the FY00/01 budget, we estimated power sales of $81,180,000. Attachment II of the 
Budget Analyst report illustrates the breakdown of budgeted vs. actual to-date and 
projected fiscal year sales by customer segment. 

The principal unknown at this time is the amount of energy that will be available for sale 
during the spring snowmelt as excess energy. Spring excess energy must be offered first 
to the Districts, and then to other municipal utilities and public power agencies. In the 
event that Hetch Hetchy cannot find sufficient qualified wholesale buyers for its excess 
energy during the spring snowmelt, PG&E "banks" the power for us and allows us to 
return it to ourselves during "like time periods" (i.e., if we deposit the power during off- 
peak periods, we take it back during off-peak periods; etc.). 

To-date, we have had $8.5 million in unbudgeted sales, as follows: 

ISO Demand Reduction Program $ 2,000,000 m 
Wholesale Sales (Summer 2000) $ 4,500,000 [2] 
— —Emergency Sales to ISO $ 2.000.000 [31 "r ~ — 



Total Unbudgeted Sales: $ 8.500.000 

Notes : 

[1] Hetch Hetchy coordinated the City's participation in the ISO's Demand Reduction Program 
during Summer 2000. Hetch Hetchy 's share of the revenues earned under this program was 
S2 million. 

[2] In addition, Hetch Hetchy sold S4.5 million of power during summer to municipal utilities 
and other public agencies, including the Districts. Excess power was available during this 
period because Hetch Hetchy needed to reduce the reservoir elevation at Cherry (Lake Lloyd) 
in order to drain the Cherry-Eleanor tunnel for maintenance and repair work scheduled during 
Fall 2000. 

[3] Further, the ISO has called upon Hetch Hetchy throughout the past year for emergency power 
support needed to keep power flowing on the California electric grid. To-date, sales of such 
emergency power to the ISO were $2 million. We have provided some small quantities of 
emergency power to the ISO since January 1, 2001; however we do not yet know how much 
the ISO will be paying for that power so it is not included in these projections. 

Attachment II of the Budget Analyst report projects a total of $14 million in unbudgeted 
revenues during FY00/01. Of this amount, $8.5 million has already been earned and $2.3 
million is projected to be earned as a result of the temporary (3 month) $0.01/kWhr 
surcharge authorized by the CPUC to be charged to PG&E customers effective January 1, 
2001.' The remaining $3.2 million is attributable to a combination of increased loads and 
a presumption that the PG&E surcharge will remain in effect through June 30, 2001 . 



1 Under existing PUC rate policy which was ratified by the Board of Supervisors, certain classes of 
Hetch Hetchy customers are charged rates equivalent to PG&E retail. Specifically, Enterprise Fund 



33 



Attachment III 
Page 5 of 7 

For purposes of this supplemental, we have assumed incremental revenues of $10.8 
million ($8.5 million already earned, plus $2.3 million from rate increases) will be 
available. To the extent that actual revenues may exceed this amount, the amount of 
funds appropriated from Hetch Hetchy's Fund Balance will be reduced accordingly. 

Wholesale Power Market Outlook 

Based on recent power price forecasts issued by PIRA Energy Group, present 
expectations are that power prices will remain at very high levels through February, but 
are expected to decline in March through May (spring snowmelt). Thereafter, presuming 
we see a warm summer similar to Summer 2000, prices are expected to reach or exceed 
levels experienced during June through October 2000. PIRA believes that continued 
shortages of natural gas supplies will keep prices higher than "normal" (although not at 
the extraordinarily high levels experienced this winter) until gas production catches up 
with demand. PIRA experts believe that may occur within 12-18 months. 

Presently, we are struggling to prepare an estimate of power purchase costs for FY01/02. 
^VTe believe that costs" maynmgeTrbm $40 1 o $80 million. The actual level of 
expenditures experienced will depend upon a number of factors, the most significant of 
which are: 

• Hydrology . As a 100% hydroelectric utility, Hetch Hetchy's power purchase 
budget is significantly impacted by variations in hydrology. This year, for 
example, we are experiencing dry conditions. To-date, we have received about 
75% of the precipitation normally received by this time. This year's final power 
purchase expenditures will depend in large part upon whether or not we approach 
"normal" hydrological conditions within the next 4-6 weeks. 

Hetch Hetchy's actual electric production varies widely with hydrology - from 
about 1.2 to 2.2 billion kWhrs per year. Since we cannot accurately predict 
hydrology, we assume "normal" (historic average) hydrological conditions at the 
beginning of every budget year. In other words, our FY01/02 budget assumes full 
reservoirs on July 1 st and "normal" hydrology thereafter. 

• Multi-year power purchase . The daily California wholesale power market is 
presently very volatile. Volatility can be significantly moderated by extending the 
term of a power purchase commitment beyond the period of resource shortages. 
Specifically, the market is presently quoting lowest prices for purchase 
commitments of 5-10 years. Since the market expects electric shortages to 
continue for up to 3 years, Hetch Hetchy is issuing a request for bids for a 3, 5, 7 
and 10 year purchase of power. 



and Retail customers are charged PG&E retail rates. 



34 



Attachment EI 
Page 6 of 7 

In addition, Hetch Hetchy constantly seeks improvements to its net revenues through a 
combination of reduced costs of service and new sources of revenues. These efforts will 
continue diligently throughout the next and future years. However, since results are 
speculative at present, we would not recognize the impact of any net revenue 
improvements in Hetch Hetchy's budget until such time as an opportunity has progressed 
to a point where its successful implementation seems fairly certain. 

Salary Savings 

In Hetch Hetchy's request for supplemental appropriation, we indicated an expectation of 
approximately $1 million in salary savings during FY00/01. As you know, Hetch Hetchy 
commenced a reorganization during calendar year 2000. That reorganization is still in 
progress. A major part of that reorganization involved significantly upgrading the skills 
of existing and new Hetch Hetchy professional/technical staff such that they could help 
Hetch Hetchy aggressively pursue new business opportunities and restore the levels of 
economic benefits Hetch Hetchy produced prior to the electric restructure. However, it 
took a bit longer than we expected to develop and implement the class consolidation 
strategy needed to implement the reorganization. As a result, we have a significant 
number ot vacancies which produced the $ 1 million in projected salaries savings. 

On November 13, 2000, DHR approved the consolidation of six classifications in the 
Energy Conservation and the Water and Power Resource Planning series into two 
professional/technical classifications: the 5601 Utility Analyst and the 5602 Utility 
Specialist. The purpose of this class consolidation was to significantly streamline the 
process of recruiting and hiring a wide range of analytical and project development staff 
- from power marketers and schedulers, to hydrologists, economists, environmental 
experts, energy efficiency experts, and renewable energy developers. Recruitment began 
on November 22, 2000. We are presently in the process of reviewing the applicant pool 
and making offers. We expect to fill 12 professional7technical vacancies within the next 
4-6 weeks. 

These positions are of critical importance to Hetch Hetchy's mission and are the 
foundation of Hetch Hetchy's business analysis and project development. Now that the 
class consolidation has been approved, we intend to fill all of these vacancies 
expeditiously. Five of these positions will implement the aggressive energy conservation 
and efficiency projects that are needed to implement the Mayor's directive of a 5% 
energy savings by Summer 2001 and a 10% energy saving by Summer 2002. Three of 
these positions will develop and implement renewable energy and distributed generation 
projects, including solar, wind, fuel cells and natural gas cogeneration. Two positions will 
serve as the City's experts in matters concerning "siting" of power generation and 
transmission facilities, with a goal of minimizing air emissions and other environmental 
impacts and attaining the public policy goal of "environmental justice." The remaining 
two positions are needed to support Hetchy Hetchy's wholesale water and power 
operations, especially in power marketing and water supply planning. 



35 



Attachment HI 
Page 7 of 7 

The projected $1 million in salary savings assumes that we will fill all of these vacancies 
within the next 4-6 weeks. 

Capital Project Deobligations 

Hetch Hetchy has critically reviewed its current capital projects and determined that the 
proposed New Moccasin Penstock Project can be deferred for 1-2 years without risk to 
public health and safety. We are presently completing engineering design on this project 
but intend to defer putting the project out to bid until next year. In the meantime, we 
have set aside the balance of $7.4 million remaining in the New Moccasin Penstock 
Project in case it is needed to meet additional unbudgeted power purchases. 

There are two existing penstocks at Moccasin Powerhouse. It is our intent to build the 
new Moccasin Penstock before taking the existing penstocks out of service for 
maintenance and repairs. In this manner, the reliability of this segment of the City's 
water delivery system will be maintained. 

The repair of the existing penstocks has been deferred until FY02/03. Therefore, the new 
Moccasin Penstock can also be deferred until that time. It is our intent to request 
refunding of this project in FY02/03. When both existing penstocks are repaired and the 
new penstock placed in service, generation at Moccasin Powerhouse will increase by 
approximately 3%, or 12,000 MWhrs per year. 



Distribution 

Mayor's Budget Office - James Maclachlan 

Controller's Office - Matthew Hymel 

PUC General Manager - John P. Mullane, Jr. 

PUC Assistant General Managers - Larry Klein, Bill Berry 

PUC Finance - Kingsley Okereke, Carlos Jacobo 

HHWP - Senior Management Staff 

Records 



36 



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37 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



Item 5 - File 01-0145 



Department: 



Item: 



Location: 



Sheriffs Department 

Treasure Island Development Authority 

Resolution approving a sublease, retroactive to July 1, 
2000, between the City and the Treasure Island 
Development Authority for property on Treasure Island 
commonly known as the Treasure Island Naval Brig, or 
jail, (Buildings 670 & 671), located at the Corner of 13 th 
and M Streets on Treasure Island, for an annual rent not 
to exceed $250,000 per year. 

Treasure Island Brig facility (Buildings 670 & 671), 
located at the Corner of 13 th and M Streets 



Lessor: 
Lessee: 

Sublessee: 

Term of Sublease: 



Purpose of Sublease: Under the proposed sublease, the Sheriffs Department 

would— use— the-Treasure— I-s-1-a-nd— Naval— Brig for-training 

and, in the case of an emergency, overflow jail facilities. 

U.S. Navy (Master Lease) 

Treasure Island Development Authority 

Sheriffs Department 

Commencing retroactively to July 1, 2000 and 
terminating on May 15, 2005, for a sublease term of four 
years and eleven months (See Comment No. 1). Under the 
proposed sublease, the Sheriffs Department would have 
three options for using the Naval Brig ("the Brig") facility: 

1) The Sheriffs Department would be authorized to use 
the Brig facility for a total of 90 days per fiscal year for 
Deputy Sheriff training purposes; 

2) Additionally, upon written notice of an emergency to 
the Treasure Island Development Authority, the 
Sheriffs Department would be able to use the Brig 
facility during an emergency to house approximately 
100 nonviolent prisoners during the duration of the 
emergency. 1 Under the proposed sublease, the Sheriffs 



1 The proposed lease defines "emergency" as "...any situation or condition in the City and 
County of San Francisco which creates a widespread threat to life, property, or the welfare of 
the City and County of San Francisco or its citizens as determined by the Mayor." 

BOARD OF SUPERVISORS 
BUDGET ANALYST 
38 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



Right of Renewal: 



Department would not be charged additional rent by 
the Treasure Island Development Authority for such 
emergency use of the Brig facility; 

3) The Sheriffs Department may request permission 
from the Treasure Island Development Authority to 
use the Brig facility during non-emergencies to: (a) 
temporarily house approximately 100 nonviolent 
prisoners, or (b) use the facility for any use, such as 
longer-term housing of inmates, approved in writing 
by the Executive Director of the Treasure Island 
Development Authority. The Sheriffs Department 
would be required to make such requests at least 30 
days prior to the date the Sheriffs Department would 
like to begin using the facility. According to Mr. 
Stephen Proud of the Treasure Island Development 
Authority, before granting permission for such non- 
emergency use of the Brig facility, the Treasure Island 
Development Authority would have the option to 
negotiate an amended lease including an increased 
rent with the Sheriffs Department if the Sheriffs 
Department proposed using the facility for an 
extended period of time. Such a lease amendment and 
any related additional funds would be subject to 
approval by the Board of Supervisors. The subject 
sublease states that the Treasure Island Development 
Authority "...shall not unreasonably withhold 
permission to use the Premises during such non- 
emergency and/or non-Permitted Use Period." 

None 



Number of 
Square Feet: 



Approximately 2.25 acres (98,010 square feet), including 
approximately 28,163 square feet for the Brig building. 
The balance of 69,847 square feet (98,010 less 28,163) 
would be used by the Sheriffs Department for secured 
prisoner outdoor recreation and parking. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 

39 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Rent and Other Costs 

Payable to the Treasure 

Island Authority by the 

Sheriffs Department: $250,000 per year, paid annually in advance of July 1 st for 

each, fiscal year during the four-year and eleven-month 
term of the lease. In addition to the $250,000 annual rent, 
the City will be required to pay to Treasure Island 
Development Authority additional fees of $19,620 per 
year, including: 

(1) The City will pay for the Common Area Maintenance 
Charge (Navy CAM Charge) fee charged by the Navy 
to the Treasure Island Development Authority under 
the Master Lease. Under the proposed sublease, the 
Sheriffs Department would be required to pay $900 
per month, or $10,800 annually, to the Treasure 
Island Development Authority for the CAM Charge. 2 



(2) The City will pay to the Treasure Island Development" 
Authority a monthly Landscaping Charge of $735, for 
a total annual charge of $8,820. 

Therefore, the total annual charges to be paid by the 
Sheriffs Department to the Treasure Island Development 
Authority will be $269,620 ($250,000 in rent plus $19,620 
in additional fees). 

Ms. Jean Mariani of the Sheriffs Department advises 
that the Sheriffs Department will make Navy CAM and 
Landscaping payments monthly to the Treasure Island 
Development Authority, for the entire term of the 
sublease, whether the Sheriffs Department is using the 
facility or not. The proposed sublease contains no 
provisions for annual adjustments for the rent, the CAM 
or the Landscaping Charge. 



2 According to Mr. Stephen Proud of the Treasure Island Development Authority, the CAM is based 
on SO. 025 per square foot per month for the 28,163 interior space of the Brig building and SO. 003 per 
square foot per month for the 69,847 exterior space, totaling $913.62 per month. However, the 
proposed sublease states that the Navy CAM charge is not to exceed $900 per month. Therefore the 
Sheriffs Department would be required to pay to the Treasure Island Development Authority $900 
per month, or $10,800 annually. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

An 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



Source of Funds: 



Ms. Mariani advises that the Sheriffs Department's 
Fiscal Year 2000-2001 General Fund budget includes 
$269,620 to fund the $250,000 in rent and $19,620 in 
additional fees discussed above, which the Sheriffs 
Department must pay to the Treasure Island 
Development Authority for Fiscal Year 2000-2001 (See 
Comment No. 4). 



Utilities and 
Maintenance: 



Description: 



Under the proposed sublease, the City would pay for all 
maintenance and utility costs at the Brig facility. Mr. 
Stephen Proud of the Treasure Island Development 
Authority advises that the City would be required to pay 
these costs, estimated at $92,000 annually, year round for 
the entire four years and eleven months of the sublease 
term. (See Comment No. 4 for all estimated costs.) 



lay 2, 1997, the Board of Supervisors authorized the 
creation of the Treasure Island Development Authority as 
a nonprofit public benefit corporation to act as a single 
entity focused on the planning, redevelopment, 
reconstruction, rehabilitation, reuse and conversion of 
former United States Naval Station Treasure Island 
(Resolution No. 244-97-3). On October 12, 1997, the 
California Legislature approved the Treasure Island 
Conversion Act of 1997, which designated the Authority 
as a trustee of the State Tidelands Trust and as a 
redevelopment agency with jurisdiction over Treasure 
Island and Yerba Buena Island. The Treasure Island 
Development Authority currently leases from the Navy 
the Treasure Island Brig facility, discussed below, under a 
five-year Master Lease, which began on April 5, 1999 and 
will terminate on April 4, 2004. (See Comment No. 2 
below). 

The proposed resolution would authorize a sublease 
between the City and the Treasure Island Development 
Authority for the Sheriffs Department to use the Brig on 
Treasure Island. The Brig is a two-story, 28,163 square 
foot jail facility built by the Federal government in 1992. 
As described above, under the proposed sublease the 
Sheriffs Department would have authority to use the 
Brig facility, for: (1) 90 days of officer training; (2) to 
temporarily house prisoners during an emergency; and (3) 
to temporarily house prisoners during non-emergency 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

A1 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

periods, or for any other use, as approved by the 
Executive Director of the Treasure Island Development 
Authority. According to Mr. Proud, before granting 
permission for such non-emergency use of the Brig 
facility, the Treasure Island Development Authority 
would have the option to negotiate an amended lease and 
increased rent with the Sheriffs Department if the 
Sheriffs Department proposed using the facility for an 
extended period of time, which would be subject to 
approval by the Board of Supervisors. 

According to Ms. Mariani, the Sheriffs Department 
currently plans to use the Brig facility as a training 
facility and as a temporary emergency overflow jail. Ms. 
Mariani reports that the training to take place at the Brig 
would consist of an annual Advanced Officer course for all 
sworn employees working in City and County jails and a 
-4our^to-seyen-week- intKdu^ory^^our^e--fbr— new-ly-hir&d- 



officers. According to Ms. Mariani, the Sheriffs 
Department would use the Brig facility as a temporary 
overflow jail for emergencies such as large protests that 
result in mass arrests. Furthermore, Ms. Mariani advises 
that the Sheriffs Department does not have alternative 
vacant space for overflow housing of prisoners. In the 
past, when the Sheriffs Department has faced jail 
overcrowding, the Sheriffs Department has rented jail 
space from other jurisdictions, and when such space is not 
available, the Sheriffs Department has been forced to 
release prisoners from custody early, according to Ms. 
Mariani and as stated in Attachment I, provided by the 
Sheriffs Department. 

Tenant 

Improvements: The Fiscal Year 1997-98 budget, as finally approved by 

the Board of Supervisors, included a $2,100,000 General 
Fund reserve for the Treasure Island Brig project. The 
Sheriffs Department planned a project that would convert 
the Treasure Island Brig facility to a permanent jail 
facility that would house 140 prisoners in order to relieve 
jail overcrowding at County Jail No. 3 in San Bruno. Ms. 
Mariani advises that the Sheriffs Department was never 
able to operate the Treasure Island Brig as a full-time jail 
due to insufficient staffing (discussed further in Comment 
No. 6 below). Ms. Mariani advises that since 1997, the 
Sheriffs Department has expended a total of $1,099,409 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

in capital improvements, listed as construction costs in 
Attachment II, provided by the Sheriffs Department. In 
addition, Attachment III provided by the Sheriffs 
Department contains an explanation of these projects and 
the amount originally budgeted for these projects, totaling 
$1,380,000 or $280,591 less than the actual expenditures 
of $1,099,409 due to savings realized during construction, 
according to Ms. Mariani. 

Comments: 1. According to Ms. Mariani, the proposed sublease will 
commence retroactively because the Sheriffs Department 
has been using the Brig since July 1, 2000 for training 
purposes. Ms. Mariani advises that the Sheriffs 
Department did not first obtain Board of Supervisors 
approval before using the Treasure Island Brig facility 
because the Sheriffs Department and the Treasure Island 
Development Authority were negotiating to finalize the 
sublease documents. ■ : 



2. As noted previously, the Treasure Island Development 
Authority currently leases from the Navy the Treasure 
Island Brig facility under a five-year Master Lease, which 
began on April 5, 1999 and will terminate on April 4, 
2004. The Budget Analyst notes that the term for the 
proposed sublease between the Sheriffs Department and 
the Treasure Island Development Authority would expire 
on May 15, 2005, more than one year past the expiration 
of the Master Lease with the Navy. Mr. Proud advises 
that the Treasure Island Development Authority expects 
to complete the transfer of ownership of the Naval Station 
on Treasure Island from the Navy to the Treasure Island 
Development Authority before the Master Lease the 
Treasure Island Development Authority holds with the 
Navy expires. According to Mr. Proud, in the event that 
such a transfer does not take place before the Master 
Lease expires, the Treasure Island Development 
Authority would seek an extension of the Master Lease 
with the Navy. 

3. Ms. Mariani reports that, since 1997, the Sheriffs 
Department has expended a total of $2,335,311 at the 
Treasure Island Brig, including a total of $1,099,409 in 
construction costs and $1,235,902 in operational costs, as 
outlined in Attachment II, provided by the Sheriffs 
Department. Ms. Mariani advises that the total 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



$1,235,902 in operating costs, including the limited 
staffing, utilities and supplies required to support the 
construction improvements taking place. The total 
expenditure of $2,335,311 also includes $44,248 in 
operating costs since July 1, 2000 for Fiscal Year 2000- 
2001. According to Ms. Mariani, upon approval of the 
proposed sublease, the Sheriffs Department would also 
pay to the Treasure Island Development Authority the 
entire $250,000 in rent for FY 2000-2001, plus the $900 
monthly Navy CAM fees and the $735 monthly 
Landscaping fees, discussed above, retroactive to July 1, 
2000, for a approximate total one-time payment of 
$263,080 ($250,000 rent plus $7,200 for eight months of 
Navy CAM fees and $5,880 for eight months of 
Landscaping fees, for July of 2000 through February of 
2001). Ms. Mariani advises that the Sheriffs Department 
has a total of $269,620 in the department's Fiscal Year 
2000-2001 budget to cov er this one-time payment of 
$263,080, as well as the $3,600 in Navy CAM fees and 
$2,940 for the remaining four months of Fiscal year 2000- 
2001 (March through June of 2001). 

4. As shown in Attachment II, provided by the Sheriffs 
Department, annual cost to the Sheriffs Department for 
the proposed lease and operation of the Treasure Island 
Brig would be an estimated $373,620 per year. This 
annual budget of $373,620 includes: (a) $269,620 in rent 
and additional fees to be paid to the Treasure Island 
Development Authority ($250,000 for rent plus $10,800 
for the Navy CAM Charge plus $8,820 in Landscaping 
fees), (b) $80,000 for utilities, (c) $12,000 for maintenance, 
(d) $10,000 for contractual services, including pest control 
and the purchase of bottled water, and (e) $2,000 for 
materials and supplies. Ms. Mariani advises that the 
Sheriffs Department would use existing staff and salaries 
to provide staffing at the Brig during training periods. 
According to Ms. Mariani, if the Sheriffs Department 
were to house prisoners temporarily at the Brig during an 
emergency, the Sheriffs Department would most likely 
staff the facility using overtime funds. Depending on the 
scale of the emergency, the Sheriffs Department would 
either fund the additional costs of operating an emergency 
overflow jail at the Brig from existing budgeted funds or 
be required to request a supplemental appropriation for 
such unexpected costs, according to Ms. Mariani. Ms. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

LL 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Mariani advises that the Sheriffs Department is unable 
to provide an estimate for how much additional funding 
would be needed, since such an estimate would depend 
entirely on the magnitude of emergency. 

5. Under the proposed sublease, the Sheriffs Department 
would not have exclusive rights to the Treasure Island 
Brig. The sublease states that the Treasure Island 
Development Authority "...shall have the right to enter 
and use the Premises at any time during the Term of this 
Agreement which does not conflict with any Permitted 
Use Period." Mr. Proud advises that such provision was 
included to allow the Treasure Island Development 
Authority access to the Treasure Island Brig, when the 
Sheriffs Department was not using the facility, for 
purposes such as renting the facility to film studios or 
other short-term purposes. 



6. In 1997 the Sheriffs Department began plans to 
renovate the Treasure Island Brig facility in order to use 
the Treasure Island Brig as a full-time County Jail. 
Initially, the Sheriffs Department proposed housing an 
average of 130 to 140 prisoners who would otherwise be 
housed at Jail No. 3 in San Bruno, as part of an effort to 
relocate as many inmates as possible from Jail No. 3 in 
anticipation of the United States District Court 
stipulating that the Sheriffs Department must reduce the 
inmate population at San Bruno Jail No. 3. However, Ms. 
Mariani advises that ultimately, the Sheriffs Department 
was able to fulfill required improvements at the San 
Bruno Jail No. 3, outlined by the United States District 
Court, without relocating prisoners to the Treasure Island 
Brig. As described in further detail below, the Sheriffs 
Department completed capital improvements at the 
Treasure Island Brig during Fiscal Years 1997-1998 and 
1998-1999. However, in Fiscal Year 1999-2000, the 
Sheriffs Department was unable to house inmates at the 
Treasure Island Brig due to insufficient staffing. 

Ms. Mariani advises that after the Sheriffs Department 
completed its capital improvements to the Treasure 
Island Brig, in Fiscal Year 1999-2000 the department 
began using the Treasure Island Brig for training 
purposes. Mr. Proud advises that the Sheriffs 
Department did not pay any rent to the Treasure Island 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



Development Authority during completion of the capital 
improvements at the Treasure Island Brig or during the 
subsequent period of training during Fiscal Year 1999- 
2000. 

Fiscal Year 1997-1998 

In November of 1997 the Board of Supervisors approved a 
supplemental appropriation of $1,699,955 (File 101-97-20) 
to fund capital improvements and operating costs at the 
Treasure Island Brig, as well as to fund 24 new positions 
(22 Deputy Sheriffs and two engineers), which the Board 
of Supervisors also approved in 1997 to staff the Treasure 
Island Brig. 3 However, Ms. Mariani advises that Sheriffs 
Department did not house inmates at the jail in Fiscal 
Year 1997-1998 because the capital improvements 
required more time than was originally expected and 
were not completed until the end of Fiscal Year 1998- 
1999r^te^^^r^sult7 = the^Sheriff s" Department expended" a" 
total of" $9327289 on ~the~Treasure Island Brig in Fiscal 
Year 1997-1998, as shown in Attachment II. The total 
expended amount of $932,289 included $573,560 in 
capital costs and $358,729 in operating costs for the 
limited staffing, utilities and supplies required to support 
the construction improvements taking place, according to 
Ms. Mariani. Ms. Mariani advises that the Sheriffs 
Department did not fill the 24 new positions approved the 
previous fiscal year and instead used the resulting salary 
savings to fund deficits in other accounts in the 
department's budget. 

Fiscal Year 1998-1999 

According to Ms. Mariani, in Fiscal Year 1998-1999, the 
Sheriffs Department was appropriated $5,989,987 in its 
original budget, for operating costs ($5,173,526) and 
additional capital improvements ($816,461) to run a full- 
time jail at the Treasure Island Brig. Ms. Mariani advises 
that the budgeted amount for operating costs included 
approximately $2.3 million for the salaries, benefits and 
related costs of approximately 42 existing positions to be 
transferred from the San Bruno Jail No. 3 to the Treasure 
Island Brig. However, the Sheriffs Department again 
postponed operating the Brig as a full-time jail in order to 



3 The $1,699,955 appropriation was made from a $2,100,000 General Fund Reserve that was 
established by the Board of Supervisors in the Fiscal Year 1997-98 budget for the Naval Brig 
on Treasure Island. 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

66 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

complete additional improvements necessary for housing 
inmates, according to Ms. Mariani. Ms. Mariani advises 
that in Fiscal Year 1998-1999, the Sheriffs Department 
expended $1,135,018 at the Treasure Island Brig, as 
outlined in Attachment II, leaving a balance of $4,854,969 
(original budget of $5,989,987 less expenditures of 
$1,135,018). Of this balance of $4,854,969, Ms. Mariani 
advises that approximately $2.3 million funded the 
existing 42 employees discussed above, which remained at 
the San Bruno Jail No. 3 and were never transferred to 
the Treasure Island Brig as previously planned. Ms. 
Mariani advises that in Fiscal Year 1998-1999, the 
Sheriffs Department again postponed filling the 24 new 
positions approved in Fiscal Year 1997-1998, and the 
department used the resulting salary savings of 
approximately $2,554,969 to fund deficits in other 
accounts in the department's budget. 



Fiscal Year 1999-2000 

Ms. Mariani advises that for Fiscal Year 1999-2000, the 
Sheriffs Department was appropriated $5,195,625 in its 
original budget for expenditures at the Treasure Island 
brig. However, in Fiscal Year 1999-2000, the Sheriffs 
Department was unable to house inmates at the Treasure 
Island Brig due to insufficient staffing, according to Ms. 
Mariani. Ms. Mariani advises that a growing inmate 
population in the County required the Sheriffs 
Department to operate San Bruno Jail No. 3 at full 
capacity, thus preventing the Sheriffs Department from 
transferring the existing 42 San Bruno positions to the 
Treasure Island Brig and leaving the Treasure Island 
Brig with insufficient staff to operate as a jail. Ms. 
Mariani states in Attachment I that the Sheriffs 
Department has never received full funding to operate the 
Treasure Island Brig and all other jails in the system at 
full capacity at the same time. Ms. Mariani further 
advises that the Treasure Island Brig is a very labor- 
intensive jail and that operating San Bruno Jail No. 3 at 
full capacity is more cost effective than transferring 
inmates to the Treasure Island Brig. As stated previously, 
the Sheriffs Department had originally made plans to 
operate a full-time jail at the Treasure Island Brig in 
anticipation of the United States District Court requiring 
a reduction in the number of inmates at San Bruno Jail 
No. 3, which ultimately was not necessary. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 

LI 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



However, in order to meet staffing requirements outlined 
by the United States District Court's ruling against the 
Sheriffs Department, the Sheriffs Department 
reassigned to the San Bruno Jail No. 3 the 24 new 
positions originally approved in Fiscal Year 1997-1998 for 
the Treasure Island Brig. As a result, the Sheriffs 
Department expended only $223,756 of its Fiscal Year 
1999-2000 budget of $5,195,625 for the Treasure Island 
Brig. Ms. Mariani advises that the remaining balance of 
$4,971,869 was used: (a) to fund the existing 42 
employees that were intended to be transferred to the 
Treasure Island Brig but instead remained at San Bruno 
Jail, (b) to fill the 24 positions approved in Fiscal Year 
1997-1998 for the Treasure Island Brig, but now needed 
at the San Bruno Jail No. 3. Ms. Mariani advises that any 
additional salary savings realized from position vacancies 
was _ used to fund" dencitsin other accounts in the Sheriffs 
Department's budget. 

7. Ms. Mariani states in Attachment I that: 

"...While the jail population has leveled off over 
the past year, it is again on the increase. We 
cannot predict the size of our jail population in the 
future and we will not have a new jail facility [to 
replace the San Bruno Jail No. 3] for at least three 
years. Therefore, it is only prudent that we protect 
the investment the City has made in [the Treasure 
Island Brig] as a hedge against future population 
increases. It is also insurance against another 
Federal lawsuit should the jails become 
overcrowded during this period." 

Ms. Mariani advises that, at this time, the Sheriffs 
Department will take advantage of using the Treasure 
Island Brig for training, which will be greatly enhanced 
by having access to actual jail cells. Ms. Mariani reports 
that due to the County's large inmate population, which 
currently consist of approximately 1,900 inmates in the 
City's eight jails, the Sheriffs Department has no other 
vacant jail space available for training. Prior to the 
Sheriffs Department beginning to use the Treasure 
Island Brig for training purposes in Fiscal Year 1999- 
2000, the Sheriffs Department was required to hold 

BOARD OF SUPERVISORS 

BUDGET ANALYST 

48 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

training in a conference room located in City-owned office 
space at 555 7 th Street. Ms. Mariani notes that this 
conference space does not meet the Sheriffs Department's 
training needs because it is particularly important for 
newly-hired officers to gain training experience in a 
actual jail facility as opposed to using a simulated 
environment. In addition, the Sheriffs Department will 
have access to the Treasure Island Brig to house prisoners 
during emergencies. 

8. The proposed sublease states that both the City and the 
Treasure Island Development Authority "...may 
terminate this Sublease prior to the Expiration Date [of 
May 15, 2005] by giving to the other party written notice 
of intent to terminate the Sublease one year prior to the 
intended date of termination." 

9. According to Mr. Proud, the Treasure Island 
Development Authority hired a private firm, Clifford 
Associates, to appraise the value of the subject Treasure 
Island Brig facility. On July 21, 2000, the appraiser 
determined that the fair market rent for the Brig facility 
would be $1.1 million per year. Mr. Proud advises that 
the Treasure Island Development Authority has agreed to 
charge the Sheriffs Department an annual rent of 
$250,000, or 22.7 percent of the Brig's annual rental 
market value, since the Sheriffs Department will only be 
authorized to use the Brig facility for 90 days, or 
approximately one-fourth of a year, per year for training 
purposes. Mr. Steve Alms of the Real Estate Division of 
the Administrative Services Department has reviewed the 
appraisal of the Brig facility commissioned by the 
Treasure Island Development Authority and agreed that 
the rent charged to the Sheriffs Department represents 
fair market value. 

10. The subject sublease states that the Sheriffs 
Department: 

"...shall not permit any inmates to be housed at 
the premises who have a known record of violent 
behavior, including without limitation, a known 
record for murder, manslaughter, assault, battery, 
rape, or sexual molestation. Subtenant [Sheriffs 
Department] shall not permit any portion of the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Premises to be used as a shooting range by any of 
tbe Subtenant's peace officers, personnel, or 
invitees. Subtenant acknowledges that there are 
residential dwellings and a public elementary 
school in the general vicinity of the Premises, and 
Subtenant agrees to use good faith efforts to 
prevent any interference with such residential and 
public school activities by Subtenant's use of the 
Premises." 

Mr. Proud advises that the Treasure Island Development 
Authority plans to give residents on Treasure Island 30 
days notice of any plans of the Sheriffs Department to 
house inmates in the Brig facility in non-emergency 
situations. In addition, Ms. Mariani advises that the 
training to be conducted at the Brig by the Sheriffs 
Department will not involve any live ammunition or 
chemical_agents^ 



11. Under the proposed sublease, the Sheriffs 
Department indemnifies the Treasure Island 
Development Authority and the Navy, as Master 
Landlord, and their agents and employees as defined in 
the lease. The proposed sublease states: 

"Subtenant [Sheriffs Department], on behalf of 
itself and Subtenant's Agents, covenants and agrees 
that the Indemnified Parties [described above] and 
Master Landlord shall not be responsible for or 
liable to, and, to the fullest extent allowed by any 
Laws, Subtenant hereby waives all rights against 
the Indemnified Parties and releases them from, 
any and all Losses, including, but not limited to, 
incidental and consequential damages, relating to 
any injury, accident or death of any person or loss or 
damage to any property, in or about the Premises, 
from any cause whatsoever, including without 
limitation, partial or complete collapse of any 
improvements on the Premises due to an 
earthquake or subsidence, except only to the extent 
such Losses are caused by the negligence or willful 
misconduct of the Indemnified Parties." 

According to Mr. Donnell Choy of the City Attorney's 
Office, the indemnification provision contained in the 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



REVISED 2/23/01 
Item 5 - File 01-0145 
Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

sublease is standard in all subleases entered into by the 
Treasure Island Development Authority with any entity 
wishing to sublease property on Treasure Island. Mr. 
Choy advises that if there were another large earthquake 
comparable to or greater in magnitude than the 1989 
Loma Prieta Earthquake during the term of this sublease, 
the City would not be able to look to the Treasure Island 
Development Authority to recover any losses arising 
therefrom, according to Mr. Choy. Mr. Choy advises that 
when the City is acting as the landlord in its own leases, 
the City includes similarly broad indemnification 
provisions in its leases. 

12. In summary, the Budget Analyst notes the 
following: (a) since Fiscal Year 1997-1998, the Sheriffs 
Department has expended a total of $1,099,409 
(Attachment II) in capital expenditures to convert the 
T -rpa-si-vrP-T-sl a-nH-Rr-fg- -i-nf.n- a j a i 1 nsah1e-hy-t,hA-T,i ty ^- (b) 



the Sheriffs Department originally intended to house 
approximately 130 to 140 inmates at Treasure Island 
Brig in an effort to relieve overcrowding at the San 
Bruno Jail No. 3; (c) in order to staff the converted 
Treasure Island Brig, the Sheriffs Department received 
24 new positions during Fiscal Year 1997-1998; (d) the 
Sheriffs Department was also budgeted funds to 
operate the Treasure Island Brig as a full-time jail, 
including $5,173,526 in Fiscal Year 1998-1999 and 
$5,195,625 in Fiscal Year 1999-2000; (e) however, 
because the Treasure Island Brig configuration is such 
that its operation is more labor-intensive than other 
City jail facilities, the Sheriffs Department was unable 
to operate the Treasure Island Brig due to staffing 
limitations and, therefore, expended the additional 
funds elsewhere in the City jail system to compensate 
for an increase in the prisoner population; (f) by 
requesting that the Board of Supervisors approve the 
subject sublease of the Treasure Island Brig, the 
Sheriffs Department is now proposing to use the 
Treasure Island Brig for the alternative purpose of 
training officers and maintaining space for emergency 
overflow housing of inmates. 

Recommendation: Approval of the proposed resolution is a policy matter for 
the Board of Supervisors. 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



City and County of San Francisco 



OFFICE OF THE SHERIFF 




Attachment I 
i?aze 1 ot 2 



Michael Hennessey 
SHERIFF 

415-554-7225 



February 20, 2001 
Ref. No.: CFO 01-002 



TO: Budget Analysts Office 

FROM: Jean M. MarianiJChief Financial Officer 



= Si^^eff == tea^e-ijftrT5Tf*5a5ure Island Brig 

During 1997, the City was under a federal court order to resolve jail 
overcrowding and conditions at County Jail #3 in San Bruno. In 
conjunction with the Mayor and the City Attorney, the Sheriff proposed 
opening the Treasure Island Brig to reduce the population at CJ#3 as 
part of the settlement of the lawsuit. The Board of Supervisors 
approved a supplemental appropriation that year, anticipating 
occupancy of the Brig sometime in the following fiscal year (see Lt. 
LaVigne's February 9, 2001 memorandum for a discussion of the 
capital improvements related to the facility). 

When the final draft of the settlement was presented to the court, use 
of the Treasure Island Brig to house prisoners was not included. 
However, greatly increased staffing at CJ #3 was part of the 
settlement, so the staff approved for TI were assigned to CJ #3 
instead. 

Because the jail population was continuing to increase during that 
time, we were concerned that we would have need of the Brig for 
overflow purposes. We do not have other appropriate vacant space for 
housing prisoners. In those instances in the past where we have had 
significant and serious overcrowding, the Sheriff has been forced to 
release prisoners from custody early (or rent space in Alameda 
County's jail, now unavailable). 



RCOM 456. GTY HAUL 

1 OR. CARLTON a. QaoOLETT 7LACS 



SAM FHAMCISCO, CA »4103 
Kuc.'dixl fuptr 



FA* 4 15 • S6-» - 7CS0 



Attachramt I 
Page lofl 



While the jail population had leveled off over the past year, it is again 
on the Increase. We cannot predict the size of our jail population in the 
future and we will not have a new jail facility (to replace CJ #3) for at 
least three years. Therefore, it is only prudent that we protect the 
investment the City has made in this facility as a hedge against future 
population increases. It is also insurance against another federal 
lawsuit should the jails become overcrowded during this period. 

In the Interim, the Sheriff's Department has taken advantage of the 
facility for training. State training standards for deputy sheriffs require 
four to six weeks of core training in jail management techniques 
before working in a jail, as well as 24 hours of annual training for 
continuing certification. Having actual jail cells available enhances 
training in cell removal techniques, etc. 

We have used the Treasure Island Brig for prisoners twice, during the 
2000 millennium weeken d, to free u p space at the 425-7^ St. jail in 
=eas^tr^reiveremTras3 _ aTrests, and for a multi-jurisdiction mass-arrest 

coordination site with the U.S. Marshal and the FBI. 



The attached spreadsheet presents the Sheriff's Department 
expenditures to date for the Treasure Island Brig. Our estimated 
annual costs, including lease, utilities, and maintenance expense, are 
approximately $373,620. The Mayor's Office included and the Board of 
Supervisors approved $260,871 for this lease payment in our 2000-01 
budget. 

In 1997-98 and 1998-99, the Sheriff's Department budget included 
appropriations of $1,699,955 and $5,989,987 for operating the 
Treasure Island Brig. In 1999-00, we combined the TI Brig budget with 
the San Bruno budget, and used the vacant positions in the TI budget 
to meet the terms of the federal court settlement. The TI Brig Is a very 
labor-intensive jail, less cost-effective to operate than the Sheriff's 
other facilities. The Sheriff has never received full funding to operate 
the TI Brig and all other jails in the system at full capacity. The 
funding levels presumed partial closure of several floors of CJ #3, and 
a transfer of those Inmates and deputies to TI. 



90 "d 1U101 



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Attachment III 
Page 1 ot 2 



San Francisco Sheriffs Department 

INTER-OFFICE CORRESPONDENCE 

Sheriffs Bureau of Building Services 

Attn: Ms. Jean Mariani VjjQf) Friday, February 09, 2001 

From: Lt Michael La Vigne M£-£^ — 

Subj: Capital Improvements at me Treasure Island Brig 

The following is a short history and accounting of the capital improvements the 3FSD has 
made to date at the Treasure Island Brig. 

1 996 - In anticipation of the CCSF taking over the Treasure Island & Yerba Buena Island 
properties from the U. S. Navy, inspections of the various buildings were performed by CCSF and 
California State officials having jurisdiction. In mid 1 996 (May & June) the SFSD received copies 
of seismic, building code, and fire/life safety code deficiency reports from the CCSF, California 
Board of Corrections, and California Stale Fire Marshal. The SFSD also reviewed the Brig to 
determine what security or operational modifications would have to be made to accommodate 
prisoners. 

1997 - Based upon the above surveys and reports, the SFSD developed a scope of work to 
correct the code, security and operational issues. From this scope of work a capital budget was 
developed and submitted to the CCSF as supplemental budget request in August of that year. This 
supplemental budget request, along with an ordinance permitting the SFSD to contract for the 
work, was approved by the CCSF Board of Supervisors in November 1997. The scope of work 
was divided into three basic contracts as indicated below: 

Electronic Security System Improvements: 

Scope: Replace central control panel, add CCTV cameras and monitors, repair and replace locks 

and moving gates. 
Cost: $240,000 
Time: January- April 1998 

Prisoner Exercise Yard Improvements: 

Scope: Replaces old fencing with new double security fence and paves over gravel exercise yards. 

Cost: $340,000 

Time: July - November 1 998 



Page 1 of 2 



Attachment III 
Page Zot Z 



Fire/Life Safety Upgrades: 

Scope: Replaces old fire alarm system, apply spray-on cementitious fire proofing on underside of 
roofs and roofing supports, replaces several doors and frames with code compliant 
assemblies, remodels paths of travel to provide clear fire exit routes, and upgrades and 
expands the fire sprinkler system- 
Cost: $500,000 
Time: September 1998 -March 1999 

In addition to the above, the SFSD has made improvements to the temperature control system of 
the Brig, as well as installed some kitchen equipment 

The CCSF still has some disability access issues at the Brig, but at this point we have closed out 
all construction contracts, and any disability access issues would be addressed in the future. 

If you have any questions, please calL 



Page 2 of 2 
56 



"Memo to Finance Committee 

February 28, 2000 Finance Committee Meeting 



Item 6 - File 01-0270 
Item: 

Amount: 
Source of funds: 
Description: 



Comments: 



Supplemental appropriation ordinance in the amount of 
$100,000 for earthquake relief to India. 

$100,000 

General Fund Reserve 

According to recent news reports, on January 26, 2001 an 
earthquake measuring 7.9 on the Richter scale occurred 
in India killing over 19,000 persons and leaving 
thousands homeless. The proposed supplemental 
appropriation would commit $100,000 for disaster relief in 
India. 

According to the Office of the Sponsor of the proposed 



ordinance,, the proposed supplemental appropriation of 
$100,000 to India would be coordinated with the Indo- 
American Trade and Commerce Council's Gujarat 
Earthquake Relief Fund for FY 2000-01. 

According to Mr. Steve Kawa of the Mayor's Office, the 
disaster relief contribution would be disbursed through 
the Mayor's Office of Economic Development (MOED). Mr. 
Kawa adds that MOED would be responsible for assuring 
that the funds are contributed to the Indo-American 
Trade and Commerce Council Relief Fund and used for 
the intended purpose of providing relief for the India 
earthquake victims. 

1. On February 5, 2001, the Board of Supervisors 
approved a resolution (File 01-0176) expressing sympathy 
and concern for the earthquake victims in western state of 
Gujarat, India, extending condolences to family members 
of those who have passed away and urging President 
Bush, the United States Senate and the House of 
Representatives to use all available resources and funds 
to augment and expedite existing relief efforts to 
earthquake victims and their families. 

2. In October of 1999, the Board of Supervisors approved 
an appropriation of $250,000 for earthquake relief efforts 
in the City of Taipei. Also, in 1995, $50,000 was 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



TMemo to Finance Committee 

February 28, 2000 Finance Committee Meeting 

appropriated by the Board of Supervisors for earthquake 
relief in the City of Osaka following the Kobe earthquake. 

3. On February 21, 2001, the Finance Committee 
recommended approval of a supplemental appropriation 
of $100,000 for earthquake relief in El Salvador (File 01- 
0272). 

Recommendation: Approval of the proposed ordinance is a policy matter for 

the Board of Supervisors. 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 



Item 8 -File 01-0223 

Department: 

Item: 



Amount: 
Source of Funds: 
Description: 



Department of Public Health (DPH) 

Resolution endorsing the transfer of State General Fund 
monies, previously allocated to the DPH, to the California 
Mental Health Directors Association for a contract to 
provide services to foster care and other Medi-Cal eligible 
children who are residents of San Francisco but are 
placed in facilities outside of San Francisco. 

$48,330 

State of California General Fund 

In FY 1999-2000, the DPH began participating in a 
Statewide contract with other counties for the provision of 
mental health .services -to", children placed in out-of-county- 
foster care facilities. The California Mental Health 
Directors Association (CMHDA), a nonprofit organization 
comprised of mental health directors Statewide, entered 
into a contract with a Statewide Administrative Services 
Organization (ASO), a private behavioral health 
organization, in November of 1999, to provide mental 
health referral services for children placed in out-of- 
county foster care facilities. Under the current Statewide 
contract with ASO, a foster parent, requesting mental 
health services for a child residing in San Francisco to be 
placed in an out-of-county foster care facility, would not 
require prior DPH authorization as was previously 
required. Instead, the contractor, ASO, would be 
authorized to provide a mental health referral directly to 
the foster parent. 

Under the ASO contract, the ASO would pay the mental 
health provider directly for the mental health services 
provided to foster care and other Medi-Cal eligible 
children and would receive reimbursement from CMHDA, 
including provider payments and administrative fees 
under the contract term period of November 1, 1999 
through June 30, 2001. 

Under the proposed resolution, San Francisco's DPH 
would transfer to CMHDA $48,330 of the State General 

BOARD OF SUPERVISORS 
BUDGET ANALYST 



Memo to Finance Committee 



February 28, 2001 Finance Committee Meeting 



Fund monies previously allocated for distribution to San 
Francisco for such mental health services for FY 2000-01. 
These subject State General Fund monies would be used 
to reimburse CMHDA for payments made to the ASO for 
mental health services to be provided to foster care and 
other Medi-Cal eligible children who are residents of San 
Francisco but who are placed in facilities outside of San 
Francisco. According to Dr. Albert Eng from the DPH, the 
DPH, and not the State, determines the amount of State 
General Fund monies to be transferred to the CMHDA to 
contract with the ASO to provide services to foster care 
and other Medi-Cal eligible children placed outside of San 
Francisco. Dr. Eng estimates that the proposed transfer 
of $48,330 will be more than sufficient to cover the costs 
of mental health services provided to foster care and other 
Medi-Cal eligible children placed outside of San Francisco 
for FY 2000-2001. 



In addition, San Francisco is eligible to receive $51,670 in 
Federal matching funds in FY 2000-01 for total funding of 
$100,000 ($48,330 State General Fund monies + $51,670 
Federal matching funds) for the mental health services 
provided to children placed in out-of-county foster care 
facilities. 

Comments: 1. According to Dr. Eng, the purpose of transferring the 

subject State funds in the amount of $48,330 from the 
State to the CMHDA, to provide reimbursement for the 
subject services, is to facilitate access to mental health 
services for foster children placed in out-of-county foster 
care faculties. 

2. Dr. Eng states that the proposed transfer by DPH of 
State funds, previously allocated to the DPH, to the 
California Mental Health Directors Association would 
facilitate the authorization and reimbursement process 
for mental health services provided to children placed in 
out-of-county foster care facilities, and that the transfer of 
such funds would not result in any additional costs to San 
Francisco. The current contract with CMHDA for 
coordination with ASO will expire on June 30, 2001. Dr. 
Eng, anticipates that the contract with CMHDA would be 
renewed. 



BOAKD OF SUPERVISORS 

BUDGET ANALYST 

60 



Memo to Finance Committee 

February 28, 2001 Finance Committee Meeting 

Recommendation: Approve the proposed resolution. 



Harvey M. Rose 



Supervisor Leno 
Supervisor Peskin 
Supervisor Gonzalez 
Clerk of the Board 
Controller 
Steve Kawa 



BOARD OF SUPERVISORS 
BUDGET ANALYST 



A 2 l - 



i HOI THEN j 

HINDI l<1 I IP 
UTICMJMAHA NE , 

2004